The British pound moved higher vis-Ã -vis the U.S. dollar today as cable tested offers around the US$ 2.0345 level and was supported around the $2.0220 level. Cable extended Fridayâ€™s gains after November annual output price inflation surged to its highest level in more than sixteen years, up 4.5%, while input prices were up 1.7% m/m and 10.2% y/y, the largest annual gain since July 2006. These data followed Bank of Englandâ€™s decision to reduce its repo target rate by 25bps last Thursday and these data could lessen the chances of an additional BoE MPC monetary tightening in early 2008. Other data released today saw BRC November retail sales growth at its weakest level since October 2005, up an annual 0.4%. Also, the government reported October house prices were up 11.3% y/y. Cable bids are cited around the US$ 2.0175 level. The euro came off vis-Ã -vis the British pound as the single currency tested bids around the ₤0.7180 level and was capped around the ₤0.7220 level.
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