Pound Retreats Despite Upbeat U.K. Inflation Figures

The British pound retreated from recent highs against major currencies in the Asian session on Tuesday, despite the release of upbeat U.K. inflation figures in April.

Data from the Office for National Statistics showed that U.K. inflation accelerated to the highest since 2013 largely due to higher air fares in April. Inflation rose more-than-expected to 2.7 percent in April from 2.3 percent in March. Inflation was forecast to rise to 2.4 percent.

On a monthly basis, consumer prices gained 0.5 percent, faster than the expected 0.4 percent.

Factory gate prices have grown for 15 consecutive months to April 2017 despite raw material costs being relatively flat since January 2017, the ONS said in a separate communique.

Month-on-month, output price inflation held steady at 0.4 percent. Likewise, the annual growth in factory gate prices remained at 3.6 percent in April.

In the Asian trading today, the pound held steady against its major rivals.

In the European trading, the pound fell to nearly a 6-week low of 0.8578 against the euro and nearly a 2-week low of 1.2760 against the Swiss franc, from early highs of 0.8502 and 1.2861, respectively. If the pound extends its downtrend, it is likely to find support around 0.87 against the euro and 1.25 against the franc.

Against the U.S. dollar, the pound dropped to a 4-day low of 1.2865 from an early 6-day high of 1.2957. the pound may test support near the 1.24 region.

The pound edged down to 146.09 against the yen, from an early 5-day high of 147.11. On the downside, 143.00 is seen as the next support level for the pound.

Looking ahead, U.S. housing starts, building permits and industrial production, all for April, are slated for release in the New York session.