Pound Sterling Reverses Against Peers as UK CPI Data Takes Center Stage

Pound Sterling Gains on Weaker US Data, Focus Shifts to Upcoming UK CPI for BoE Outlook

The Pound Sterling rose to 1.3330 against the US Dollar after weaker-than-expected US economic data, but reversed gains against other major currencies on Friday. Investors are closely watching next week's UK Consumer Price Index (CPI) data, which could offer insights into the Bank of England's (BoE) future policy direction. The UK's stronger-than-expected GDP growth provided room for the BoE to maintain interest rates at current levels, especially if inflation remains elevated.

BoE Chief Economist Huw Pill expressed concerns about persistent inflation, suggesting that high inflation would support the need for higher rates. This comes after the BoE recently reduced its benchmark lending rate to 4.25%. With the CPI data due next week, market participants are keen to gauge whether inflationary pressures are easing, which could influence expectations for a rate cut in June.

The movement of the Pound and the outlook for UK monetary policy will remain a key focus for traders in the coming days.