Pound slides ahead of inflation data

The pound is off versus the US dollar as traders consider the prospects for tomorrow’s UK inflation report.

GBP/USD is trading at $1.5977, down 0.25%, as sterling is still suffering the effects from Friday’s stronger-than-anticipated US non-farm payrolls report. The consensus had been for an increase of 120,000 new jobs in October, whereas it transpired that over 200,000 new jobs were created. The news sent sterling lower, as traders felt it would speed up the possibility of tapering from the Federal Reserve.

Tomorrow, the UK will reveal the latest consumer price index (CPI) data at 9.30am (London time). Economists are expecting a reading of 2.5%. Bank of England governor Mark Carney has previously stated he is willing to accept a relatively high level of inflation while the economy is growing, and unless the inflation figure greatly overshoots the estimate, the report is unlikely to have major impact on value of the pound.

On Wednesday, Mr Carney will make a statement at 10.30am (London time). If his remarks about the UK economy seem bullish, we could see the pound rally.

GBP/USD chart

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