(RTTNews) - UK's sterling extended its previous session rally against the currencies of Europe and Switzerland in early New York trading on Tuesday. The pound also started edging higher against the greenback after a brief descending trend in early trading.
The pound extended gains after the Office for National Statistics said inflation accelerated for the first time in eight months. UK annual inflation rose to 1.5% in October from 1.1% in September. Annual inflation accelerated for the first time since February 2009 and stood slightly above the expected rate of 1.4%. On a monthly basis, consumer prices were up 0.2%, faster than the 0.1% expected.
Core inflation that excludes volatile energy, food, alcohol and tobacco prices, stood at 1.8% on a yearly basis, up from 1.7% in September.
However, the broader measure of inflation known as the Retail Price Index, which includes the cost of housing, is still 0.8% lower than a year ago, compared with a fall of 1.4% in September. Economists were looking an annual 1% decline. The index stood at 216, up from 215.3 in the prior month.
The pound surged to 0.8843 against the European currency by 10:00 am ET, the highest level since September 15. This was up 2.5 percent from last week's 15-day low of 0.9067 and 0.7 percent from yesterday's close of 0.8904. On the upside, the sterling may find resistance near the 0.881 level.
Traders reacted to a report from the Eurostat showed that Eurozone unadjusted trade surplus stood at EUR 3.7 billion in September, up from a deficit of EUR 2.3 billion in August, revised from EUR 4 billion deficit reported initially. Exports dropped 18% year-on-year to EUR 111.8 billion in September, while imports fell 24% to EUR 108.1 billion.
The pound also jumped to a 2-month high of 1.7102 against the Swiss franc by 10:00 am ET, compared to 1.6952 hit late New York Monday. The pound-franc pair is presently worth 1.71 with 1.717 seen as the next target level.
The franc fell against other major currencies today as the Swiss retail trade turnover declined for a second straight month in September.
The Federal Statistical Office said Switzerland's real retail trade turnover declined 1.6% in September from the corresponding month of the previous year. Sales were down 1% in August, following July's 1% increase. Sale of food increased 1.1%, reversing 0.3% fall in August. Meanwhile, clothing and footwear sales declined 8.9%.
The pound drifted higher to 150.26 against the Japanese yen by 10:00 am ET from its early European session's low of 149.41. The pound-yen pair, which closed yesterday's deals at 149.82, is presently worth 149.92.
