Pound Weakens Ahead of Macroeconomic Reports

The Great Britain pound fell as speculators cut their bets on an interest rates hike by the UK central bank, but the currency attempts to pare its losses as the economic data is expected to show that inflation has accelerated.
The report from Office for National Statistics on the consumer prices is expected to show an increase by 4.2 percent in April, following the 4.0 percent advance in March. Home prices jumped to the highest level since 2008 this month, according estimates before the data from the Department for Communities and Local Government that is expected to show a growth by 0.9 percent.
The macroeconomic data could put the Bank of England in a difficult position. The accelerating inflation pressure the bank to raise the rates, yet the economy isn’t considered to be ready for burden of higher borrowing costs. The minutes of the BoE monetary policy meeting will be released on May 18, possibly suggesting further moves of the central bank’s policy makers on the lending rates, while the Inflation Letter of the bank’s Governor, released today, can show opinion of the BoE officials regarding the inflation.
GBP/USD traded at 1.6202 today as of 00:06 GMT, following the yesterday’s drop from 1.6209 to 1.6189. GBP/JPY traded at about 131.04 after it earlier fell from 131.06 to 130.75.

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