Investing.com - The pound rose against the dollar on Tuesday after U.K. inflation rates beat expectations, while investors avoided the greenback head of the Wednesday release of the Federal Reserve''s latest policy meeting minutes.
In U.S. trading on Tuesday, GBP/USD was trading at 1.6842, up 0.17%, up from a session low of 1.6802 and off a high of 1.6864.
Cable was likely to find support at 1.6733, Thursday''s low, and resistance at 1.6997, the high from May 6.
Upbeat consumer inflation data out of the U.K. bolstered the pound.
The Office for National Statistics reported earlier that the U.K. consumer price index in April rose 1.8% on year and up from 0.4% in March, beating expectations for 1.7% and 0.3%, respectively.
The rise in inflation was due in part to higher transport costs, the ONS said, as airlines pushed up ticket prices in time for the Easter holidays.
The ONS also said that U.K. house prices rose by 8.0% in March from a year earlier, slowing from 9.2% in February. House prices in London jumped 17% in the last 12 month, it added.
Meanwhile in the U.S., investors were turning their attention to the minutes from the Fed’s latest monetary policy meeting on Wednesday, as they awaited insight on the central bank''s view of the economy.
Recent U.S. economic reports indicating that the recovery remains uneven have weighed on U.S. Treasury yields, pressuring the dollar.
Elsewhere, sterling was up against the euro, with EUR/GBP down 0.27% at 0.8131, and down against the yen, with GBP/JPY down 0.05% at 170.57.
Expectations for looser monetary policy in Europe softened the euro.
The European Central Bank left interest rates unchanged at 0.25% at its last meeting, though ECB President Mario Draghi said the governing council felt comfortable loosening policy at its next meeting, with markets bracing for rate cuts or additional easing measures.
Also weakening the single currency were uncertainties surrounding European Parliament elections due to take place later this week and what changes to austerity policies they could bring.
Elsewhere in Europe, Germany’s producer price index fell unexpectedly in April, official data showed on Tuesday.
In a report, Destatis said that Germany''s producer price index fell 0.1% from March and 0.9% on year, both figures missing market expectations.
Analysts had expected the German PPI to rise 0.1% from March and contract 0.8% on year.
On Wednesday, the U.K. is to release data on retail sales, the government measure of consumer spending, which accounts for the majority of overall economic activity. Meanwhile, the Bank of England is to publish the minutes of its May meeting.
Fed Chair Janet Yellen is to speak at an event in New York.
Later Wednesday, the Fed is to publish the minutes of its latest meeting.