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GBP/USD falls as UK inflation drops more than expected

The January UK CPI and RPI inflation reports have now been released. As noted here a couple of times earlier this morning, the markets were looking for the monthly readings to fall, but not so the annualised readings. Well, that is almost what has been revealed, but the monthly readings for CPI and RPI were lower than forecast, falling by 0.6% and 0.3% respectively. The annualised rate for CPI remained unchanged at 4% and the annualised rate of RPI fell back to 4.9%. The pound has immediately fallen upon seeing this news. The EUR/GBP has lifted and the GBP/USD has taken out the low seen yesterday afternoon at 1.2573. UK bonds are of course higher on this news and that has really shifted the FTSE 100, rising sharply on this data. The GBP/USD is currently trading at 1.2566 sand right now testing the 200 day moving average 

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