GBP/USD jumps on U.K. inflation data, nearing 2-month high

NEW YORK (Forex News Now) – The pound jumped against the dollar on Tuesday, approaching a 2-month high, after official data showed that core U.K. inflation rose unexpectedly in June.

In U.S. afternoon currency trading, GBP/USD traded at 1.517, up 0.93 percent on the day and close to the 2-month high of July 8, 1.5241.

Britain’s statistics bureau said earlier that said while annual consumer price inflation eased to 3.2 percent in June, in line with economists’ expectations, core inflation rose 3.1 percent from a year earlier, up from 2.9 percent in May.

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Analysts had expected June’s core inflation – which excludes volatile food, energy and alcohol items – to drop to 2.7 percent, two global forex news outlets reported.

According to forex analysis, GBP/USD was likely to touch immediate support around Monday’s low, 1.4948, and encounter resistance around the high of May 3, 1.5316.

Also Tuesday, official data showed that the U.S. trade deficit widened unexpectedly in May to its highest since November 2008.

The Commerce Department report was followed by more bad news: The IBD/TIPP Economic Optimism Index showed that U.S. consumer gloom in July reached its highest level since the recession was near the bottom.

Meanwhile, sterling rose versus the yen: GBP/JPY traded at 134.21, up 0.75 percent on the day.

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