Investing.com - Sterling was broadly mixed on Tuesday despite official data showing inflation hit a five year high in November.
At 12:00 GMT, GBP/USD was 1.3355, up 0.11% from the previous session close of 1.3340.
Cable briefly peaked to 1.3380 immediately following the inflation release, before dropping to the day’s low of 1.3312 at 10:15 GMT.
According to the Office for National Statistics, the consumer price index (CPI) rose 3.1% (YoY) in November, the highest level since March 2012. The ONS forecast an increase of 3.0%, in line with October’s inflation reading.
Inflation remains above the Bank of England’s 2% target. As the recent inflation reading is more than 1% above target, the BoE Governor Mark Carney is required to write a letter to the Chancellor of the Exchequer Philip Hammond explaining the rise.
Investors will be watching the BoE’s Monetary Policy Committee as they meet on Thursday for a shift in tone among the Committee’s members. Interest rates are widely expected to remain on hold at 0.50%, following the 0.25% rise in November.
The dollar was lower against most major currencies ahead of the Federal Reserve policy meeting, which will begin later on Tuesday afternoon.
The US dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was down 0.13% at 93.82.
Lower than forecast ZEW data in the euro-zone hit the euro. EUR/USD pared gains to sit at 1.1777, an increase of just 0.07%. EUR/GBP was almost unchanged at 0.8819.
Sterling was unchanged against the safe haven currencies. GBP/JPY was comfortably above the 150.00 level, at 151.48. GBP/CHF was 1.3230.
The pound suffered losses against the commodity currencies.
GBP/AUD was down 0.47% to 1.7640. While GBP/NZD dropped 0.33% to 1.9234.
The kiwi enjoyed gains across the board on the news that Adrian Orr will head the Reserve Bank of New Zealand from March 2018.
GBP/CAD slipped 0.12% to 1.7130.
Investors will be watching central bank meetings of the Fed, ECB and BoE this week.
UK employment data will be released on Wednesday, where average earnings will scrutinised alongside Tuesday's inflation data. UK retail sales will be released on Thursday.