Investing.com - The pound touched session highs against the dollar on Tuesday after data showed that U.K. inflation rose at a faster than forecast rate in April, but gave back some gains after the data also showed that consumer prices are rising faster than wages.
GBP/USD was last trading at 1.6825, just 0.07% higher for the day after briefly touching highs of 1.6864.
Cable was likely to find support at 1.6782, the low of May 16 and resistance at 1.6881, the high of May 13.
The annual rate of consumer inflation rose to 1.8%, up from 1.6% in March and ahead of expectations for 1.7%, the Office for National Statistics said.
That means prices are rising faster than wage growth after data last week showed that average earnings rose by 1.7% in the three months to February, and by only 1.4% excluding bonuses.
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.
On a month over month basis, consumer prices increased by 0.4%, compared to estimates for a 0.3% rise.
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.
Elsewhere Tuesday, sterling rose to 16-month highs against the euro, with EUR/GBP touching lows of 0.8118.
The euro remained under pressure from mounting expectations for monetary easing by the European Central Bank at its next meeting in June and data last week showing that the euro zone economy grew at a slower than forecast rate in the first quarter.
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