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GBP/USD eyes $1.57
The latest UK inflation figures are due to be released this morning and currency traders will be debating how close the Bank of England governor Mark Carney is to having to write a letter to chancellor George Osborne. Low UK inflation levels are, for the time being, not necessarily a bad thing as the last few years have seen the spending power of the UK populous dented, with weak average earnings increases. When looking at the inflation rate it is also worth noting that this next quarter in the run up to Christmas is the most important for the both food and clothing retailers, and as such even more aggressive price wars could materialise.
As highlighted by my colleague David Madden yesterday the break below the $1.57 level could be a psychological one, and a squeeze below the current $1.5650 levels could take GBP/USD all the way down to $1.55.