Pound Falls on UK Political Uncertainty Amid Weak Inflation Data

The  Sterling pound today traded lower against the  US dollar as  markets awaited the  crucial meeting between the  British PM Theresa May and  her cabinet to  approve the  draft Brexit deal. The  pound declined further following the  release of  weak UK consumer price index report in  the  early London session, which further soured investor sentiment towards the  Sterling.
The  GBP/USD currency pair today dropped from an  opening high of  1.3025 to  a  low of  1.2886 before retracing some of  its losses.
The  currency pair’s decline was largely fueled by  the  uncertainty surrounding PM May’s leadership amid the  ongoing dissent within her Cabinet and  in  Parliament regarding her approach to  the  Brexit negotiations. The  pair headed lower after the  UK’s Office for  National Statistics released the  CPI data for  October, which came in  at  0.1% missing expectations set at  0.2%. The  annualized headline CPI print came in  at  2.4%, while the  core CPI print was recorded at  1.9%; both prints missed expectations by  0.1%. The  weak retail price index data also contributed to  the  pair’s decline, while the  upbeat producer price index and  house price index releases helped reduce the  pair’s losses.
The  pair retraced some of  its losses as  news headlines indicated that the  government expects its coalition partner, the  Northern Irish DUP to  support PM May’s Brexit plan.
The  release of  the  US CPI data later today, and  the  outcome of  today’s Cabinet meeting will be the  main drivers of  the  cable’s performance over the  short-term.
The  GBP/USD currency pair was trading at  1.2951 as  at  12:36 GMT having dropped from a  high of  1.3025. The  GBP/JPY pair was trading at  147.53 having fallen from a  high of  148.43.

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