BMFN - Analytics

    BMFN

    428.50 5.50/10
    71% of positive reviews
    Real

    Sterling remains lower after UK inflation data on Brexit jitters

    The pound was trading at almost two-month lows against the dollar on Tuesday after data showing that U.K. inflation remained steady in May, as concerns over prospect of a British exit from the European Union continued to weigh.

    GBP/USD was down 0.87% at 1.4144, holding just above Monday’s two-month trough of 1.4114.

    The Office for National Statistics said the annual rate of U.K. inflation remained steady at 0.3% in May, slightly below economists’ expectations for an increase of 0.4%.

    Lower prices for clothing and footwear along with food and beverages put the largest downward pressure on inflation, the ONS said.

    Fuel prices rose as oil prices recovered, the report said.

    Core inflation, which excludes volatile energy and food costs, remained steady at 1.2%, falling slightly short of forecasts for a 1.3% increase.

    Sterling remained under pressure after a number of opinion polls showed that the EU referendum race is tightening ahead of the June 23 Brexit vote.

    Market sentiment has been hit by fears that Brexit could trigger a period of uncertainty in financial markets and hit growth in the region.

    A poll conducted by YouGov for The Times newspaper published late Monday showed that the Leave campaign held 46% support compared with 39% support for the Remain camp. Undecided voters totaled 11%.

    An ICM poll for the Guardian newspaper found that 53% supported the Leave campaign compared with 47% support for remaining.

    Meanwhile, data from betting odds supplied from Betfair on Tuesday indicated that the implied probability of a Remain vote fell to 59%, down from 78% last week.

    Sterling was slightly lower against the euro, with EUR/GBP at 0.7931, holding below Monday’s two-month highs of 0.7985.

    The safe-haven yen, which tends to be bought by investors in times of market uncertainty, rose to multi-year highs against sterling and the euro.

    GBP/JPY dropped 1.32% to 149.41, the lowest level since August 2013.

    EUR/JPY fell to lows of 118.52, the weakest since January 2013 and was last at 118.55, down 1.17% for the day.


    To leave a comment you must or Join us


    By visiting our website and services, you agree to the conditions of use of cookies. Learn more
    I agree