(RTTNews) - U.K.'s sterling edged sharply lower against its major rivals on Tuesday morning in New York after the Bank of England policy maker Adam Posen said that more monetary stimulus is needed to support economic recovery in the U.K. The pound plummeted to a 4-month low against the euro and multi-day lows versus the rest of majors.
In a speech to the Hull and Humber Chamber of Commerce, Posen said, "The case I wish to make is that monetary policy should continue to be aggressive about promoting recovery, and, subject to further debate, I think further easing should be undertaken."
Earlier in the day, the Office for National Statistics said that the British economy grew at a pace of 1.2% sequentially in the second quarter, unchanged from the estimate published in August. This was the biggest growth since the first quarter of 2001. GDP growth was 1.7% higher than the second quarter of 2009.
A separate report from the ONS showed that business investment in the U.K. increased a revised 0.7% between April and June compared to three months ago to 29.2 billion pounds. Compared with the June quarter of 2009, total business investment increased 1.9%.
The pound depreciated almost 1.4 percent to reach a 4-month low of 0.8587 against the euro around 11:10 am ET from previous session's 6-day high of 0.8469. On the downside, the pound may find target around the 0.8670 level.
Consumer price inflation in Germany accelerated slightly in September, preliminary report from the statistical office Destatis showed today. According to the report, annual inflation rose to 1.3% this month from 1% in August. On a monthly basis, prices declined 0.1%.
The sterling slumped to a 5-day low of 131.99 against the yen around 10:00 am ET and a move below the 131.70 support could set its lowest level in 2 weeks. The pound-yen pair is presently trading at 132.48.
Against the Swiss franc, the pound fell to a 4-day low of 1.5395 at this time from a weekly high of 1.5665 hit earlier in the European session. The pound-franc pair is presently worth 1.5415 with 1.5360 seen as the next likely target level.
The pound also depreciated by 1.1 percent to reach a 4-day low of 1.5722 against the US dollar before reversing its direction around 9:40 am ET. The cable is presently worth 1.5807.
The dollar pared gains after the Conference Board report showed that confidence saw a substantial retreat in September due in large part to a notable deterioration in consumer expectations.
The Conference Board said its consumer confidence index fell to 48.5 in September from a downwardly revised 53.2 in August. Economists had expected the index to edge down to 53.0 from the 53.5 originally reported for the previous month.
Earlier in the day, a report from the Standard & Poor's showed a slowdown in the annual rate of home price growth in July, although the data is largely seen as old news.
The report showed that the S&P/Case-Shiller 20-City Composite Home Price Index increased at an annual rate of 3.2 percent in July compared to a 4.2 percent increase in June. Economists had expected the index to increase at an annual rate of about 3.3 percent.
