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Forex pairs in this Article » GBP/USD (London) - GBP/USD remains under pressure, with GBP one of the worst performing currencies of the G10. Sterling has been under pressure on growing expectations that Bank of England governor Mark Carney may move the goalposts on the central bank’s rate hike threshold, maintaining a cautious, dovish stance for longer.

Inflation risks to the upside

Consensus expectations are for today’s UK consumer price index inflation numbers to print at 2.1 percent year-on-year, but the biggest risk lies to the upside, with rising utility prices filtering through to the CPI reading.

Last week’s BoE rate hike came without an accompanying statement, and chatter continues to rise speculating that Mark Carney will move to lower the threshold for a rate hike from 7.0 percent to 6.5 percent unemployment.

BoE communication

Any overshoot of inflation expectations today may be GBP positive. Any rises in inflation will make it more difficult for Mark Carney to extend the low-rate policy further into 2015. But given his robust stance towards forward guidance and market communication since taking over as governor of the BoE, it is likely that Carney will move soon to clarify the BoE position.

GBP/USD is currently trading at USD1.6373, down 0.09 percent on the session, but remains in a short-term bearish trend ahead of CPI numbers at 9:30 GMT.
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