The British Pound fell against most of the major currencies during trading today, Wednesday, after the release of key inflation data, which slowed more than expected.
Government data revealed a decrease in the consumer price inflation index to 10.1% last month, compared to expectations that indicated a slowdown to 10.3% from 10.5% in the previous reading.
Despite this slowdown, the Bank of England will continue to tighten its monetary policy by raising interest rates at its next meetings – based on expectations.
In terms of trading, the British pound fell against its American counterpart at exactly 19:00 GMT, by 1.3%, to 1.2017.
The dollar index rose by 18:43 GMT, by 0.7%, to 104.02 points, and it recorded the highest level at 104.1 points and the lowest level at 103.1 points.
Government data released today, Wednesday, revealed that the retail sales index in the United States increased by 3% last month, while analysts expected the index to rise by 1.9%.
Excluding some volatile commodities, core retail sales rose by 2.3% in January compared to expectations for a 0.9% rise.
As a result of these data, whether issued yesterday or today, investors accepted the US currency as a safe haven to hedge against inflationary pressures that have re-emerged in the United States.
The strength of the US dollar would put pressure on many commodities and industrial and precious metals
The rise in the dollar coincided with the rise in US Treasury yields, as the two-year bond yield recorded its highest level in three months.