Investing.com - The pound touched session lows against the dollar on Tuesday after data showed that the annual rate of U.K. inflation slowed in August and as uncertainty over the outcome of Scotland’s independence referendum continued to pressure the currency lower.
GBP/USD touched session lows of 1.6161 and was last down 0.38% to 1.6170.
Cable was likely to find support at the 1.61 level and resistance at around 1.6250.
The pound slid lower after the Office for National Statistics said the rate of consumer price inflation slowed to 1.5% last month from 1.6% in July, in line with forecasts. The reading matched the five year low seen in May.
The slowdown in inflation was mainly due to lower prices for fuel, food and non-alcoholic drinks the ONS said.
Consumer prices inched up 0.4% in August, in line with forecasts.
While the rate of inflation fell, a separate report showed that U.K. house prices rose at the fastest pace in seven years in July.
Average U.K. house prices jumped 11.7% in the year to July, the ONS said, and were up 19.1% in London on a year-over-year basis.
Sterling remained under pressure as uncertainty over the outcome of Thursday’s referendum on Scottish independence continued to curb investor demand for the British currency.
The latest opinion polls on the Scottish referendum have indicated that the outcome of the vote is too close to call.
Concerns over the prospect of a yes vote pressured sterling to 14-month lows against the dollar last week after polls indicated that support for the yes vote had edged into the lead for the first time since the start of the pro-independence campaign.
Uncertainty over what currency an independent Scotland would use, as well as concerns over how much of the U.K. national debt it would take on have rattled financial markets.
Bank of England Governor Mark Carney warned last week that a currency union between an independent Scotland and the rest of the U.K. would be “incompatible with sovereignty”.
Elsewhere, the pound was also weaker against the euro, with EUR/GBP up 0.41% for the day to 0.8004.