British Pound Trades at 14-Month Lows Despite Higher UK Inflation

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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