GBP/USD edging towards 1.27 as important UK data looms

As mentioned here yesterday, a little later this morning, at 7am GMT the UK will release its November CPI and RPI inflation reports. The markets are expecting slightly conflicting data here today, with monthly gains anticipated on both CPI and RPI, but with lower readings in the annualised data. The consumer price index (CPI) is the most closely watched, but in my view RPI (Retail Prices) is just as important most of the time. So, the annualised rate of CPI is expected to drop back to 4.3%, from a prior reading of 4.6%. RPI is expected to drop back to 5.6%, from 6.1% in October, but with 0.2% gain on the month, from a 0.2% decline before. CPI is forecast to rise by just 0.1% in November. Yesterday, the GBP/USD rose to a high at 1.2762 and so fell short of the previous 1.2794 high set on December 14. The pound later closed at 1.2732. It has traded to a session low at 1.2713 as I write this update and much will depend on what this inflation data has in store, as to whether the pound can rise above 1.2794, or fall back 1.2629. Those price points are the immediate ones of note this morning when this data hits the screens. The GBP/USD is currently trading at 1.2714