GBP/USD back above 1.26 as important UK inflation data looms

Further to an earlier update on the EUR/GBP, the Pound versus the dollar is very much on the radar this morning too, with that important UK CPI and RPI data due out at 7am GMT. Of course the GBP/USD did not escape the rising dollar yesterday and the earlier gains close to the 1.27 handle were soon handed back, as it fell back underneath 1.26 again. The low seen was set at 1.2573. It later closed in the US at 1.2592. So, this UK data this morning will see it move again and it does depend on what that data reveals. Here is what is expected- monthly CPI to fall by 0.3% in January from a 0.4% gain in December. The annualised rate is expected to rise though, to 4.1% from 4%. Monthly RPI is forecast to fall by 0.1%, from a 0.5% rise in December. Annualised RPI is forecast to fall to 5.1%, from 5.2%. So, as noted earlier we have disparity between the monthly and annualised rates and as far as that is concerned, it probably has much to do with oil prices. Also discounting and sales in terms of RPI is factor to consider too. All that said, I would not rule out any surprises here. Right now the GBP/USD is trying to push a little higher, trading just now at around 1.2608