British Pound Drops Despite In-Line Inflation Data Ahead of Fed Decision

The  British pound today declined against the  US dollar in  the  early European session despite the  release of  November inflation data, which met expectations. The  GBP/USD currency pair continues to  trade in  a  tight range for  the  week against the weak US dollar largely due to  the  prevailing uncertainty regarding Brexit.
The  GBP/USD currency pair today dropped from a  high of  1.2680 to  hit a  low of  1.2642 and  was within this range at  the  time of  writing.
The  currency pair’s rally this week has been significantly hampered by  the  prevalent uncertainty surrounding Brexit even as  the  UK government prepares for  a  no-deal Brexit. Theresa May’s government through the  home secretary Sajid Javid recently published a  new immigration white paper denying low-skilled EU immigrants automatic rights to  work in  the  UK. These issues overshadowed the  release of  the  November consume price index data by  the  UK’s Office for  National Statistics. The  headline CPI print came in  at  a  monthly 0.2% translating into an  annualized 2.3%, while the  core CPI print was recorded at  1.8%; all three prints met expectations.
The  Brexit headwind prevented the  Sterling pound from rallying higher against the  much weaker US dollar as  tracked by  the  US Dollar Index. It is unclear whether the  pair will rally if the  greenback falls further following the  Fed monetary policy announcement.
The  currency pair’s future performance is likely to  be affected by  the  FOMC‘s interest rate decision and  monetary policy outlook.
The  GBP/USD currency pair was trading at  1.2648 as  at  11:00 GMT having dropped from a  high of  1.2680. The  GBP/JPY currency pair was trading at  142.13 having fallen from a  high of  142.53.

If you have any questions, comments or opinions regarding the Great Britain Pound,
feel free to post them using the commentary form below.