GBP/USD extends gains above 1.28 ahead of vital UK inflation data this morning

Yesterday the Pound took advantage of the fall in the dollar that the weaker than expected US PPI report produced. Hence, the GBP/USD lifted further above 1.28 and reached levels near 1.2875 by the US close. The Pound later ended the US session at 1.2862. It has held a pretty tight range during the Asian session today, with 1.2854 to 1.2868 covering it so far. Now at 6am GMT we get some very important UK economic data in the form of the latest monthly CPI and RPI inflation reports. Whilst both these are widely expected to fall last month, there is disparity forecast between the monthly and potentially higher annualised readings in July. Perhaps the one data point to note here is the annualised service sector price reading and that is forecast to drop back to 5.5%, from 5,7%. The markets will be eyeing all this data closely, to see if there is room for another BOE rate cut next month. That prospect could determine how the Pound fares this morning. Right now the weaker dollar dynamic has helped it to rise, but do not forget that later today we also get the same CPI data from the US and that will be important to this current GBP/USD rise, just as much as the UK data is before that release. There will be much more to add on all this as the morning unfolds and immediately after the UK inflation reports hit the screens at 6am GMT. The GBP/USD is currently trading at 1.2860