Forexpros - The pound added to gains against the broadly weaker U.S. dollar on Tuesday, as market sentiment was buoyed by stronger than expected euro zone and Chinese economic data, while a decline in U.K. inflation also supported sterling. GBP/USD hit 1.5398 during European afternoon trade, the pair’s highest since Friday; the pair subsequently consolidated at 1.5380, gaining 0.36%. Cable was likely to find support at 1.5276, Monday’s low and resistance at 1.5490, the high of January 11. The pound tracked gains in the euro and other risk assets earlier after the ZEW Centre said that its index of German business sentiment recorded its largest ever monthly increase in January, indicating that the euro zone’s largest economy was performing strongly despite the effects of the region’s debt crisis. Market sentiment had been bolstered earlier after better-than-forecast data on Chinese fourth quarter growth eased concerns over the outlook for global economic growth. In the U.K., official data showed that the annualized rate of consumer price inflation declined to 4.2% in December, from 4.8% the previous month. The steep decline supported the Bank of England’s view that inflation will fall off sharply in 2012, allowing the bank to ease monetary policy further. The pound was lower against the euro, with EUR/GBP adding 0.55% to hit 0.8310. Later in the day, the U.S. was to produce a report on manufacturing activity in New York State.

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