Pound falls amid consumer pricing decline

Posted On: January 12, 2015

The pound fell 0.1 percent Monday to 1.5148 per U.S. dollar, Bloomberg reported. The currency fell to 1.5035 per U.S. dollar on Jan 8, which marked its lowest rate since July 2013. It rose 0.3 percent to 77.91 pence per euro after gaining 0.5 percent over the previous three days.

A report will show on Tuesday that annualized U.K. consumer prices increased 0.7 percent in December following a 1 percent upswing in November, the publication added.

"Markets are mindful of the upcoming data points, particularly those CPI numbers," Jeremy Stretch, head of foreign exchange strategy with Canadian Imperial Bank of Commerce in London, told the news source. "The Bank of England is going nowhere fast. Sterling looks like it's going to remain under some pressure."

Reuters reported that a decline in inflation would likely delay the Bank of England's interest rate hikes until the second quarter of 2016. This past summer, many traders expected a rate increase by the end of 2014.

Meanwhile, the pound has already depreciated by nearly 3 percent against the dollar in January, marking its weakest month since February 2013. The shifting expectations for interest rate hikes led to the pound's 18-month low of 1.5034 per U.S. dollar last week.

Category: Industry News

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