The UK’s inflation report showed that consumer prices edged slightly higher in April. Headline inflation rose 2.1% on the year advancing from 1.9% previously. This was slightly below the estimates of a 2.2% increase. Core inflation also grew at a slower pace of 1.8%, missing estimates of a 1.9% increase. Brexit continues to dominate the GBP flows. The currency fell after the UK’s House of Commons leader resigned on PM May’s approach to Brexit.
GBPUSD to Extend Declines
The currency pair lost 0.35% on the day and the bearish momentum indicates further declines. The GBPUSD could fall to 1.2606 level which would test the close from early January this year. If price does not stabilize at this level, the currency pair could be facing further losses. However, there is scope for a rebound in price given that the GBPUSD is down for the third consecutive week.