Today has seen the pound regain some lost ground against the dollar, with the currency pair so far rising over a cent.During the course of the trading session the GBP/USD cross has risen from $1.2643 to $1.2746, after the latest UK inflation reading helped lift sterling across the board.
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Following last weeks shock UK election result the pound fell against all of its major counterparts, with GBP/USD dropping three cents to a two month low of $1.2632 on Friday afternoon.
However, today's inflation figure gave the pound a much need boost, with figures confirming inflation had risen to 2.9% against a forecast of 2.7%, increasing speculation the Bank of England will need to raise interest rates sooner rather than later.
GBP/USD graph
Attention will now move away from the UK's political uncertainty and Brexit negotiations for the time being, with markets and investors now focusing on tomorrow's Federal Reserve monetary policy announcement.
Over the past few weeks markets have been pricing in the Fed hiking rates this month, although recently there have been indications Janet Yellen & Co could hold fire because of the uncertainty surrounding President Trump.
If the Fed do not raise their benchmark interest rate tomorrow, it is likely we will see the dollar weaken, and the GBP/USD cross could push back above $1.28.
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