GBPUSD rose after U.K. inflation data reported better than expected numbers, which showed a declining inflation rate. This raised speculation that the Bank of England would be less likely to implement more quantitative easing this year, which usually weakens the British currency.
GBPUSD rose to 1.5864 after the data at 09:30 GMT from the 1.5849 pre-data levels. EURGBP fell to a session low of 0.8314 within 30 minutes of the data, versus a session high of 0.8343. Sterling also gained against the Swiss franc and Japanese yen.
U.K. inflation edged down in February to the lowest level in over a year. The Office for National Statistics reported that annual consumer price inflation eased to 3.4 percent in February, slowing from a 3.6 percent annual rate in January.
On a monthly basis, consumer inflation rose 0.6 percent from January. Expectations were for a monthly inflation of 0.5 percent and a year-on-year rate of 3.3 percent.
It is hoped that the decrease in inflation will allow British consumers to increase spending this year and boost the economy.
The focus turns to the UK budget plan to be released by UK Chancellor of the Exchequer George Osborne on Wednesday.