FX round-up: CPI turns negative in April, hitting pound

A much stronger than expected reading for US housing starts and permits weighed on the single currency.

The euro/dollar slipped 0.39% to 1.1098.

They shot higher by 20.2% month-on-month in April to reach an annualised rate of 1.135m, far outpacing economists´ forecasts for a reading of 1.015m.

Economists at Barclays attributed the rise to the passing of the weather-related weakness seen over the first quarter, with the data being consistent with a return to normalcy in the housing sector.

Europe-side, the ZEW institute´s economic confidence gauge for May dropped to a reading of 41.9 fro 53.3 in the month before (consensus: 49).

Cable was particularly weak, retreating by 0.94% to 1.5512.

Consumer prices in the UK slipped by 0.1% year-on-year in April, the Office for National Statistics (ONS) reported – their first drop since 1960.

Predictably, BoE governor Mark Carney was quick to point out to ITV that the cost of living would recover in the back half of the year.

Enjoy it while it lasts was his message to Britons.

Dollar/yen advanced 0.63% to 120.67.