Wednesday, May 21, 2014

Pound Rises as Inflation Rates Beat Expectations

The pound rose against the dollar on Tuesday after U.K. inflation rates beat expectations, while investors avoided the greenback head of the Wednesday release of the Federal Reserve's latest policy meeting minutes. Recent U.S. economic reports indicating that the recovery remains uneven have weighed on U.S. Treasury yields, pressuring the dollar, meanwhile in the U.S., investors were turning their attention to the minutes from the Fed’s latest monetary policy meeting on today, as they awaited insight on the central bank's view of the economy. In U.K., Upbeat consumer inflation data out of the U.K. bolstered the pound.


The Office for National Statistics reported earlier that the U.K. consumer price index in April rose 1.8% on year and up from 0.4% in March, beating expectations for 1.7% and 0.3%, respectively. The rise in inflation was due in part to higher transport costs, the ONS said, as airlines pushed up ticket prices in time for the Easter holidays. The ONS also said that U.K. house prices rose by 8.0% in March from a year earlier, slowing from 9.2% in February.


House prices in London jumped 17% in the last 12 month, it added. Cable was traded at 1.6842, up 0.17%, rising from a session low of 1.6802 and recorded a high of 1.6864. Today, the English currency recorded a high of 1.6842 during the morning session rising from 1.6832 as open rate and the lowest during the session.


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