The British pound today hit new record lows against the US dollar in the Asian session due to the risk-off sentiment in the markets, which favored the greenback. The GBP/USD currency pair retraced some of its losses after the release of the latest UK CPI data, which was in line with expectations.
The GBP/USD currency pair today hit a 14-month low of 1.2694, but later recovered to hit a high of 1.2734 before heading lower.
The currency pair hit lows last seen in June 2017 due to the negative market sentiment towards the pound even as the greenback rallied higher. The release of the UK consumer price inflation for July by the Office for National Statistics boosted the pound. The headline CPI data remained flat during the month, which translated into an annualized 2.5%, while the core CPI came in at an annualized 1.9%; both CPI prints met expectations. The retail price index data also released today missed expectations, but had a muted impact on the currency pair. The producer price inflation report also released today was largely positive and boosted the currency pair.
The UK house price index released today came in at an annualized 3.0% in June, which was higher than the expected 2.6%, boosting the pound. However, the pound’s rally was effectively limited by the high demand for the US dollar, which is regarded as a safe haven currency.
The currency pair’s short-term performance is likely to be influenced by US releases such as the advance retail sales data.
The GBP/USD currency pair was trading at 1.2713 as at 10:31 GMT having dropped from a high of 1.2734. The GBP/JPY currency pair was trading at 141.35 having declined from a high of 141.76.
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British Pound Trades at 14-Month Lows Despite Higher UK Inflation
