Inflation figures for the UK this morning showed a surprise drop in the rate at which prices are rising. This reinforces opinion that UK interest rates are likely to remain low for some months, possibly remaining on hold beyond August, (the month many speculators are anticipating a hike).
Sterling subsequently lost ground against the Euro Dollar and most other majors, with sterling seeing losses of 1.5% vs. the Swiss Franc. Over lunch inflation figures from the US came in above expectations but trade balance figure came in far worse than anticipated. The USD has subsequently lost ground at is currently trading 0.1% from open vs. sterling.
It’s been a busy day for releases with figures from the British retail consortium at the worst level since records began. This has had a negative effect on the pound and coupled with inflation figures, it not surprising to have seen the pound lose ground today.