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The sterling erased earlier daily advances against the US dollar after data showed that the annual rate of inflation in the UK fell to a four-year low in November, relieving pressure on BoE to tighten monetary policy.

Having reached a session high at 1.6336 at 08:55 GMT, GBP/USD cross traded little changed at 1.6298 at 11:03 GMT. Support was likely to be received at December 13th low, 1.6263, while resistance was to be encountered at December 16th high, 1.6349.

On Tuesday, the UK National Statistics Office released a number of reports on key UK economic indicators.

The annual rate of consumer price inflation in the U.K. rose by 2.1% in November, slowing from 2.2% in October., marking he smallest increase since November 2009. Analysts had projected an unchanged reading. Consumer prices rose 0.1% in November from a month ago, short of analysts estimates of 0.2% gain.

The Core CPI for the 12 months to November rose 1.8%, defying analysts projections of 1.7% and accelerating from 1.7% in October. Core CPI rose 0.1% in November, from a month earlier, down from Octobers reading of 0.2%

The Retail Price Index rose in line with analysts projections, marking 0.1% gain in November, after the index was flat in October. On year-on-year basis the index increased 2.6% in November and was short of analysts expectations of 2.7% increase. In October the index stood at 2.6%.

The Input Producer Price Index (PPI) declined for a third consecutive month in November, registering 0.7% decline, after decreasing by 0.6% in October, while analysts projected that the index will slow its decline to 0.5%. In annual terms the Input PPI decreased by 1.0% in November from a year ago, in line with expectations. However, in October the index declined by mere 0.3%.

The UK Consumer Price Index (CPI) increased by 0.1% in November, less than analysts projection of a 0.2% gain. The index increased with the same 0.1% rate as in October.

Meanwhile, yesterday Markit Economics reported that the preliminary value of its manufacturing PMI for the United States slowed down to a seasonally adjusted 54.4 in December from a final reading of 54.7 in November. Analysts’ forecasts pointed that the index will advance to a reading of 54.9 during the current month. Values above the key level of 50.0 are usually considered as an indication that activity in the sector has expanded.

The US dollar, however, received support after US industrial production registered a larger than projected increase in November, with the corresponding index advancing 1.1%, compared to a 0.1% increase in October. Experts had expected a 0.1% increase this month.

The Federal Reserve may begin to scale back its $85-billion-USD monthly asset purchases at the committee’s policy meeting on December 17th-18th, rather than wait until January or March, according to 34% of economists who participated in a Bloomberg survey on December 6th. In a survey a month ago 17% of respondents projected that a tapering may occur in December.

Elsewhere, the Aussie was lower against the euro, with EUR/AUD cross up 0.26% on a daily basis to trade at 1.5424 at 8:06 GMT. AUD/NZD pair was losing 0.23% to trade at 1.0813 at 8:07 GMT, after falling to 1.0786, the pair’s lowest point since October 2008.

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