The British pound today declined against the US dollar following the release of the UK Consumer Price Index data for February. The pound gave up all of its earlier gains accumulated during the late Asian session and early European session before the release of the UK inflation data.
The GBP/USD currency pair today lost over 80 points to decline from a high of 1.4067 to trade at a low of 1.3983 at the time of writing.
The Sterling pound gave up a portion of its gains from yesterday’s rally, which was triggered by news of a Brexit transition deal between the EU and the UK. The release of the UK CPI data by the Office for National Statistics was the main trigger behind the currency pair’s decline. The headline CPI print came in at an annualized 2.7%, which was lower than the expected 2.8% print, while the core CPI print came in at 2.4% versus the forecasted 2.5%. The UK retail price index was also lower than expected as was the producer price index.
A slight increase in demand for the US dollar also contributed to the pair’s decline. The weak CPI report also lowered market expectations of an interest rate hike by the Bank of England, which contributed to the pair’s decline.
The currency pair’s future performance is likely to be affected by tomorrow’s UK labour market report and the US FOMC interest rate decision.
The GBP/USD currency pair was trading at 1.3996 as at 14:40 GMT having dropped from a high of 1.4067. The GBP/JPY currency pair was trading at 148.93 having declined from a high of 149.79.
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