After briefly breaking through $1.58 last week the pound has suffered against the U.S. dollar with GBP/USD exchange rates dropping to $1.5452 during today's session.
The pound fell across the board this morning following the latest UK CPI reading with figures showing that UK inflation has now fallen into a negative state for the first time since 1960.
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However, it is not all doom and gloom for the UK as Bank of England governor Mark Carney still expects the inflation figure to improve and push towards the central bank's target of 2% over the course of the year.
With the current inflation level still seen as only a temporary dip, it shouldn't have much of an impact on investor confidence and if we see some positive numbers from other sectors within the UK, we could easily see the pound recover the ground it has lost over the past few days.
Despite the recent drop for GBP/USD the pound has recovered remarkably well in the last month with rates climbing from $1.45 in April.
In recent weeks most of the gains can be put down to dollar weakness, if the U.S. economy continues to underperform, which in turn pushes back the chances of the Federal Reserve raising interest rates this year I still believe we could see GBP/USD climb back towards the $1.60 mark.
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