UK pound is struggling today on the currency market. Even though the pound is higher against some of its low beta counterparts, the gains are relatively small, and they have come only after earlier losses. Inflation data seems to be the main culprit.
The latest inflation data from the Office for National Statistics shows a rate of 1.9 percent for January. This represents a slowing of grown from December 2013, which saw a reading of 2.0 percent. The news puts pressure on the Bank of England to maintain its easing program, since the latest data shows that inflation slipped below the target of 2.0 percent.
Earlier, this news meant that the pound lost some ground to the US dollar. Sterling has since recovered these losses, but the gains are quite small. Additionally, pound is gaining slowly against the yen, and losing ground to the euro, which appears resurgent.
Another interesting twist in the UK pound drama is the fact that Scotland is pushing for independence. Scots want to keep the pound but self-govern, and England is telling Scotland that it will lose the pound if it leaves the union.
At 14:41 GMT GBP/USD is up to 1.6711 from the open at 1.6706. GBP/JPY is up to 171.0950 from the open at 170.2950. EUR/GBP is up to 0.8229 from the open at 0.8204.
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