UK Pound Strengthens After UK Inflation Data; BoE Policy Awaited

UK pound strengthened above $1.27 mark as services inflation remained high even as annual headline inflation returned to the central banks target of 2% for the first time in more than three years. Consumer price inflation softened to 2.0 percent in May, as expected, from 2.3 percent in April, data from the Office for National Statistics showed on Wednesday. On a monthly basis, consumer prices gained 0.3 percent in May, the same rate as seen in April. Prices were expected to climb 0.4 percent. Excluding energy, food, alcohol and tobacco, core inflation decelerated to 3.5 percent from 3.9 percent. The figure came in line with expectations. However, services inflation came in at 5.7 percent compared to 5.9 percent in April. The next trigger for the Pound Sterling will be the BoEs monetary policy decision, which will be announced on Thursday. Meanwhile, the US Dollar steadies after a modest correction below 105 mark led by slower-than-expected United States (US) monthly Retail Sales growth for May. Currently, GBPUSD is quoting at $1.2740, up 0.17% on the day.

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