Investing.com - The pound edged higher against the U.S. dollar on Tuesday, data showed that U.K. inflation rose unexpectedly last month, although the greenback remained supported by a rise in safe-haven demand.
GBP/USD hit 1.5669 during European morning trade, the session high; the pair subsequently consolidated at 1.5659, adding 0.12%.
Cable was likely to find support at 1.5591, the low of November 14 and a 14-month low and resistance at 1.5782, the high of November 13.
In a report, the U.K. Office for National Statistics said the rate of consumer price inflation accelerated to a seasonally adjusted 1.3% last month from 1.2% in September. Analysts had expected U.K. CPI to hold steady at 1.2% in October.
Month-over-month, consumer price inflation inched up 0.1% in October, in line with expectations and after holding flat in September.
Core CPI, which excludes food, energy, alcohol, and tobacco costs rose at a seasonally adjusted rate of 1.5% last month, unchanged from September. Analysts had expected core prices to rise 1.6% in October.
The pound fell to 14-month lows against the greenback last week after the Bank of England said that inflation is likely remain below its 2% target in the near term and fall below 1% at some point during the next six months.
Meanwhile, demand for the safe-haven dollar remained supported after data on Monday showed that Japan’s economy contracted by an annualized 1.6% in the third quarter, compared to forecasts for growth of 2.5%.
Investors were also cautious as Japan's Prime Minister Shinzo Abe was expected to announce later Tuesday that a sales-tax increase due to come into effect next year would be delayed and to call for elections to be held next month.
Sterling was lower against the euro, with EUR/GBP rising 0.28% to 0.7982.
Later in the day, the U.S. was to release data on producer price inflation.