The pound fell for a fifth day against the dollar after a government report showed U.K. consumer-price inflation unexpectedly slowed in November to the lowest level in four years.
Sterling dropped to a six-week low versus the euro as Bank of England Governor Mark Carney said inflation was approaching the central bank’s target and there was no need yet for an interest-rate increase. The five-day losing streak against the dollar is the longest since August. U.K. government bonds were little changed before the Federal Reserve announces tomorrow whether it will scale back debt purchases that have put downward pressure on borrowing costs around the world.
“Slightly softer-than-expected CPI inflation plays negative for sterling,” said Paul Robson, a currency strategist at Royal Bank of Scotland Group Plc in London. “This gives the Bank of England more room to keep rates low. The fall in inflation seems more about the timing of known utility price hikes and once the market trawls through the data they’ll realize that it’s only likely to be a temporary undershoot.”
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