BRUSSELS (dpa-AFX) - The British pound strengthened against the other major currencies in the European session on Tuesday, after data showed that U.K. inflation exceeded the Bank of England's 2 percent target in February for the first time since 2013.
Data from the Office for National Statistics showed that U.K. inflation accelerated more-than-expected to 2.3 percent in February from 1.8 percent in January. This was the biggest rise in prices since September 2013. Inflation was forecast to climb 2.1 percent.
The consumer prices index including owner occupiers' housing costs, moved up 2.3 percent annually, the highest since September 2013, following a 1.9 percent rise in January. Month-on-month, consumer prices grew 0.7 percent in February, faster than the expected 0.5 percent increase economists had forecast.
Another report from the ONS showed that factory gate prices rose at the highest pace since December 2011. Output prices climbed 3.7 percent year-on-year, in line with expectations and the eighth consecutive increase. Prices had climbed 3.6 percent in January.
Input price inflation came in at a double-digit 19.1 percent, but smaller than January's 20.1 percent. Economists had forecast the rate to stagnate at 20.1 percent. On a monthly basis, input prices slid 0.4 percent, in contrast to a 1.6 percent rise in January and confounded economists' expectations for a 0.1 percent increase.
In other economic news, data from the Office for National Statistics showed that U.K. public sector borrowing excluding banks in February declined to its lowest level for the month since 2007 and came in below economists' expectations. Net borrowing excluding public sector banks dropped by GBP 2.8 billion year-on-year to GBP 1.8 billion, which was lowest for February since 2007. Economists had forecast GBP 3.2 billion borrowing.
In the Asian session today, the pound held steady against its major rivals.
In the European trading, the pound rose to a 3-week high of 1.2462 against the U.S. dollar, nearly a 3-week high of 1.2408 against the Swiss franc and a 4-day high of 140.41 against the yen, from early lows of 1.2340, 1.2408 and 138.92, respectively. If the pound extends its uptrend, it is likely to find resistance around 1.26 against the greenback, 1.25 against the franc and 142.00 against the yen.
Against the euro, the pound advanced to nearly a 2-week high of 0.8651 from an early 4-day low of 0.8726. The pound may test resistance near the 0.85 region.
Looking ahead, at 6:00 am ET, Federal Reserve Bank of New York President William Dudley and Bank of England Governor Mark Carney are expected to participate in a panel discussion about ethics and culture in banking at the Bank of England, in London.
At 7:45 am ET, Federal Reserve Deputy Director for Division of Bank Supervision and Regulation Maryann Hunter will attend American Bankers Association's Government Relations Summit in Washington.
In the New York session, Canada retail sales data is set to be published.
At 12:00 pm ET, Federal Reserve Bank of Kansas City President Esther George is expected to speak on the U.S. economy and the Federal Reserve before an event hosted by Women in Housing and Finance, in Washington.
At 3:45 pm ET, Bank of Canada Deputy Governor Lawrence Schembri will deliver a speech at the Greater Vancouver Board of Trade.
Copyright RTT News/dpa-AFX