The British pound weakened in the early European session on Tuesday, after data showed that U.K. consumer prices declined for the first time since 1960.
Data from the Office for National Statistics showed that consumer prices in U.K. fell 0.1 percent in April from last year, while it was forecast to remain flat as seen in March. This was the first annual fall since the official series started in 1996. Based on comparable estimates, it was the first drop since 1960.
Month-on-month, consumer prices rose 0.2 percent, the same rate of increase as seen in March.
Core inflation eased to 0.8 percent from 1 percent in March. Economists had forecast it to remain at 1 percent.
Another report from ONS showed that factory gate prices continued its downward trend in April. Output prices dropped 1.7 percent for the third straight month in April. Month-on-month, output prices edged up 0.1 percent.
The annual decline in input prices slowed to 11.7 percent from 12.8 percent in March. On a monthly basis, input prices gained 0.4 percent.
Investors continue to monitor the situation in Greece. Greek Prime Minister Alexis Tsipras is continuing to stick to his red lines even with the country quickly running out of money.
In the Asian session, the Pound held steady against its major rivals.
In the early European trading today, the pound fell to 8-day lows of 1.5528 against the U.S. dollar and 186.37 against the yen, from yesterday’s closing quotes of 1.5669 and 187.95, respectively. If the pound extends its downtrend, it is likely to find support around 1.49 against the greenback and 181.00 against the yen.
Pulling away from an early near 3-week high of 1.4606 against the Swiss franc and a 6-day high of 0.7149 against the euro, the pound edged down to 1.4484 and 0.7203, respectively. On the downside, 1.39 against the franc and 0.75 against the euro are seen as the next support levels for the euro.
Looking ahead, U.S. building permits and housing starts for April are set to be published in the New York session.
Bretton Woods Committee 2015 Annual Meeting will be conducted in Washington D.C. at 8:30 am ET, in which World Bank Managing Director Sri Mulyani Indrawati, U.S. Treasury Secretary Jacob Lew and International Monetary Fund head Christine Lagarde are deliver speeches.
At 11:30 am ET, Bank of Canada Governor Stephen Poloz will address the Greater Charlottetown Area Chamber of Commerce in Prince Edward Island, followed by a news conference.
Half-an-hour later, Swiss National Bank director Jean-Pierre Danthine will deliver a speech titled “Swiss Monetary Policy Facts and Fictions”, in Geneva.
The material has been provided by InstaForex Company – www.instaforex.com