Forex News: Pound Rises On Strong U.K. CPI Data

Pound Rises On Strong U.K. CPI Data

(RTTNews) - The British pound strengthened against other major currencies in the European session on Wednesday, after U.K. consumer price inflation rose more than expected to a 10-month high in January.

Data from the Office for National Statistics showed that the consumer price index logged a 3.0 percent rise in January, following December's 2.5 percent increase. This was the fastest growth since March 2024. Prices were forecast to climb 2.8 percent.

On a monthly basis, the CPI edged down 0.1 percent, in contrast to the 0.3 percent increase in December. Economists had forecast a monthly drop of 0.3 percent.

Another data from the ONS showed that output prices rebounded in January after falling for four straight months. Output prices gained 0.3 percent annually after a 0.1 percent drop.

At the same time, the annual fall in input prices slowed to 0.1 percent from 1.3 percent in December.

On a monthly basis, output prices grew 0.5 percent, offsetting December's 0.2 percent fall. Meanwhile, input prices advanced 0.8 percent, faster than the 0.2 percent rise a month ago.

In the European trading now, the pound rose to a 2-month high of 1.2636 against the U.S. dollar and nearly a 7-month high of 1.1412 against the Swiss franc, from early lows of 1.2607 and 1.1389, respectively. If the pound extends its uptrend, it is likely to find resistance around 1.30 against the greenback and 1.15 against the franc.

Against the euro and the yen, the pound edged up to 0.8276 and 191.64 from early lows of 0.8289 and 191.27, respectively. The pound rose earlier to more than a 1-1/2-month high of 0.8275 against the euro and a 5-day high of 192.12 against the yen. The pound may test resistance around 0.81 against the euro and 195.00 against the yen.

Looking ahead, the European Central Bank is scheduled to issue euro area current account data for December at 4:00 am ET in the European session. The current account surplus is forecast to rise to EUR 30.2 billion from EUR 27 billion in November.

In the New York session, U.S. MBA mortgage approvals data, U.S. building permits and housing starts, both for January and U.S. Redbook report are slated for release.

At 2:00 pm ET, the Federal Open Market Committee (FOMC) meeting minutes of its latest monetary policy meeting held on January 28-29, 2025, where the interest rates were kept unchanged at 4.25 percent to 4.5 percent.

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