Pound weaker on consumer inflation report

The pound weakened Tuesday after the Office of National Statistics said that consumer prices grew by 3.3 percent in May from the same time last year and Bank of England Governor Mervyn King said that inflation is likely to remain above the Bank’s target or 2 percent well into next year.

At just before noon in New York the pound was worth $1.9530 while it traded at 79.39p to the euro.

The US dollar was also weaker, hurt by new data showing that housing starts fell in May, making it less likely that the Federal Reserve will raise interest rates anytime soon.

The greenback traded at $1.5506 to the euro just before noon in New York, while it took ¥108.0750 to buy a dollar.

The dollar also declined in relation to the Brazilian real, trading at R$1.6200 to the dollar, while the South African rand gained to R8.0165 to the dollar and the Korean won was at 1,021.5 to the US currency.

However, the euro was hurt as well as German investor confidence fell to a 15-yeaer low in June, leading some to believe that the European Central Bank could back away from its implication earlier this month that interest rates could go up soon.

Still, the euro was up in relation to the yen, which traded at ¥167.5758 to the shared currency.

Story link: Pound weaker on consumer inflation report