The British pound skinned against the United States dollar during trading activities on Tuesday, following the bad UK consumer price report indicating the lowest decline of the consumer price inflation since February within the United Kingdom.

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Image: investing.com

 

In the early European trade on tuesday, the GBP/USD pair got to 1.4918, it then finalised at 1.4931, shedding 0.14 percent. It was supported at 1.4837, the low value of Monday and  1.5148, the high value of last week Wednesday.

The United Kingdom consumer price inflation decreased from the previous January rate of 0.3 percent to 0.0 percent in February, lower than the expected value of 0.1 percent. This data was released by the National Statistics United Kingdom Office.  However, the monthly consumer price inflation increased to 0.3 percent in the month of February.

Mark Carney, the Governor of the Bank of England is expected to send a public letter to George Osborne, the Chancellor of the Exchequer because this inflation rate is lower than 2.0 percent target placed.

The main Consumer Price Inflation (CPI), which does not include energy, food, tobacco and alcohol cost went from 1.4 percent in January to 1.2 percent in February, lower than the expected 1.3 percent. Data published also indicated that United Kingdom home prices index increased 8.4 percent in the month of January.

Meanwhile, the expectations that the Feds will still increase the US rates this year are in order since their statements indicated that an interest rate hike was certain but at a slower pace than envisaged. This striving expectation initiated the recovery of the US dollar on tuesday.

The British pound also skinned down against the euro, As the Euro rose 0.31 percent against the British pound to 0.7343. The Euro got support from investors following the good Eurozone manufacturing data that was released which indicated the quickest rise since ten months now.

United Kingdom’s manufacturing purchasing managers’ index (PMI) increased in this month of March to 51.9 from the February value of 51.0, more than the expected 51.5 in the month of march. According to the published report of Markit.

The services Purchasing Managers’ index also increased in this month of march to 54.3 from the February value of 53.7, performing better than the expected value of 53.9.