It's been a game of two halves for the GBP/USD cross today, with the pound gaining around half a cent this morning before dropping nearly three quarters of a cent over the course of this afternoon. As you can see from the graph below GBP/USD exchange rates came close to breaking through the $1.53 barrier around midday but ended the day closer to $1.52 as investors get set for tomorrow's inflation report from the Bank of England.
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Since my post on Monday the UK economy and the pound had benefitted from some stronger than forecast manufacturing figures but with investor focus now switching to Thursdays inflation report any gains we have seen for Sterling have been quickly erased.
Depending on the result of tomorrow's report from Mark Carney we could see investors revise their expectations of when the Bank of England could raise interest rates. We have already seen the central bank move the goal posts a number of times over the past six months in regards to a rate hike and there is every chance we will see the same again tomorrow.
If this is the case then we could see the pound lose ground across the board and I wouldn't be surprised if rates fell back towards $1.51 over the course of tomorrows trading session.
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