Sterling up versus dollar

Sterling was supported against a broadly struggling dollar on Tuesday but the UK currency was at risk of selling after British inflation data offered investors little reason to believe the Bank of England will raise interest rates any time soon. UK inflation rose 4.5 percent year-on-year in May, holding at a 2 1/2-year high due to climbing food prices and staying significantly higher than the Bank of England's 2 percent target.
Sterling traded 0.1 percent higher on the day versus the dollar at $1.6402, well below a session high of $1.6443. Traders cited support at $1.6370, the 50-day moving average, while any gains were seen capped around $1.6450 as upside stops were seen above that level. Above that, near-term resistance loomed at $1.6480, around a high hit last week. "In the near-term sterling will stay vulnerable. There's going to be an awful lot of thrashing around on the back of rising and falling rate expectations but not much of a trend." said Adam Cole, global head of FX strategy at RBC Capital Markets.
Walker at UBS said the bank has a one-month forecast of $1.60 for the Sterling lost some ground against the euro, which edged up 0.2 percent to 88.15 pence. The single currency was broadly bid due to renewed risk appetite across the asset classes and favourable interest rate differentials. The single currency was supported around 87.93 pence, the 50 percent Fibonacci retracement of the move from the May 26 low of 86.10 to June 8 high of 89.76.