Pound Falls on Disappointing UK Inflation Report and BoE Comments

The  sterling pound today fell to  new daily lows against the  US dollar following the  release of  disappointing UK inflation data in  the  early London session. The  GBP/USD currency pair’s decline was also fueled by  dovish comments from a  Bank of  England policymaker increasing the  likelihood of  future rate cuts.
The GBP/USD currency pair today fell from a high of 1.3042 in the late Asian session to a low of 1.2985 after the inflation report but was on its way up at the time of writing.
The  currency pair rallied higher in  the  Asian session driven by  positive investor sentiment before falling in  the  London session. The  release of  the  disappointing UK consumer price index report for  December accelerated the  pound’s decline. According to  the  Office for  National Statistics, UK headline inflation remained flat in  December missing analysts expectations of  a  0.2% expansion. The  annualised print came in  at  1.3% versus the  expected 1.5% figure; the  core CPI print also missed consensus estimates. The  UK’s producer price index also missed expectations, as did the retail price index.
Dovish comments by  Michael Saunders an  external member of  the  Bank of  England’s Monetary Policy Committee also did not help the  cable. Saunders is advocating for  a  rate cut as  a  risk management strategy to  avoid low inflation levels. Boris Johnson appointed David Frost as the lead negotiator for  the  trade talks with the  EU.
The  currency pair’s future performance is likely to  be affected by  trade and  Brexit headlines as  well as  the  US PPI report.
The  GBP/USD currency pair was trading at  1.3021 as  at  11:15 GMT having recovered from a  low of  1.2985. The  GBP/JPY currency pair was trading at  143.02 having dropped from a  high of  143.38.

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