Pound gains as inflation stays high

The pound strengthened in relation to the US dollar and the euro on Tuesday as UK inflation stayed above the 2 percent target set by the Bank of England.

In late afternoon trade in London, it took $1.9684 to buy a pound and by early afternoon in New York the dollar was trading at $1.9673 to the pound, while the UK currency traded at 75.48p to the euro in New York after trading at 75.37p to the shared currency earlier.

Meanwhile, the US dollar was weaker in relation to the yen, the Swiss franc and the pound on a report from the Commerce Department that retail sales fell in December and the news that Citigroup (NYSE: C) took big losses in the fourth quarter of 2007.

The greenback dropped to ¥106.85 to the dollar in early trade in New York, but by early afternoon it had retreated to ¥107.1500, still better than Monday’s ¥108.16.

At the same time, the yen traded at ¥159.1016 to the euro and at ¥210.7916 to the pound.

The dollar touched a new all-time low versus the Swiss franc when the franc traded at SFr1.0856 to the dollar; in early afternoon trade in New York it traded at SFr1.0914 to the US currency.

Story link: Pound gains as inflation stays high