The GBP/USD pair remains subdued, trading below the 1.27 level as markets turn cautious ahead of the UK’s CPI inflation report. This key economic indicator, set to be released Wednesday, is expected to provide critical insights into the Bank of England’s policy trajectory, keeping investors on edge.
Despite recent strength in the US dollar, driven by resilient economic data, the pound has shown limited momentum. Expectations of persistent inflation in the UK could bolster rate hike bets, lending support to sterling. However, a softer-than-expected CPI print might reinforce dovish sentiment, further pressuring the pair. GBP/USD movements will likely hinge on the inflation figure’s deviation from forecasts, as traders weigh its implications for monetary policy.
