The British pound came off vis-à-vis the U.S. dollar today as cable tested bids around the US$ 1.4125 level and was capped around the $1.4310 level. Bank of England Deputy Governor Bean talked about sterling’s recent depreciation saying It is necessary to re-equilibrate the economy...and help close the current account deficit… It may be reflecting a little bit of overshooting. Data released in the U.K. today saw January consumer price inflation fall 0.7% m/m and rise 3.0% y/y, its lowest level since March 2008. Core consumer prices fell 0.8% m/m and were up 1.3% y/y, an acceleration. Also, the January DCLG house price index fell 10.2%. Bank of England is expected to continue easing interest rates in H1, possibly as early as next month. Cable bids are cited around the US$ 1.3850 level. The euro came off vis-à-vis the British pound as the single currency tested bids around the ₤0.8830 level and was capped around the ₤0.8955 level.
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