BRUSSELS (dpa-AFX) - The British pound strengthened against other major currencies in the European session on Wednesday, despite U.K. inflation falling to a ten-month low in January.
Data from the Office for National Statistics showed that U.K. consumer price inflation eased to a ten-month low in January. The consumer price index posted an annual increase of 3.0 percent, in line with expectations.
This was the lowest inflation since March 2025, when it stood at 2.6 percent. This followed December's 3.4 percent increase.
On a monthly basis, consumer prices fell 0.5 percent, as expected, reversing a 0.4 percent rise in December.
Core inflation that excludes prices of energy, food, alcohol and tobacco softened to 3.1 percent in January from 3.2 percent in December.
Another report from the ONS showed that output price inflation eased to 2.5 percent in January from 3.1 percent in December. Meanwhile, input prices dropped 0.2 percent, following a revised rise of 0.5 percent in the prior month.
Month-on-month, output prices remained flat and input prices gained 0.4 percent in January, data showed.
European stocks traded higher, as geopolitical tensions eased, and investors reacted to reports of a leadership change at the European Central Bank.
A Financial Times report said Christine Lagarde plans to leave the European Central Bank before her eight-year term as president expires in October 2027.
In the European trading today, the pound rose to 0.8719 against the euro and 1.3578 against the U.S. dollar, from early lows of 0.8739 and 1.3550, respectively. If the pound extends its uptrend, it is likely to find resistance around 0.86 against the euro and 1.38 against the greenback.
Against the yen and the Swiss franc, the pound edged up to 208.62 and 1.0471 from early lows of 207.63 and 1.0442, respectively. The pound may test resistance around 213.00 against the yen and 1.06 against the franc.
Looking ahead, U.S. MBA mortgage approvals data, U.S. building permits for November, durable goods orders for December, housing starts for November, industrial and manufacturing productions for January are slated for release in the New York session.
At 2:00 pm ET, minutes of the U.S. Fed's latest monetary policy is set to be published.
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