GBP/USD steady around 1.27 as important UK inflation data awaits at 7am GMT

Yesterday, the higher wage component of the latest UK jobs reports helped to push UK yields higher again and further dampen the prospect of a BOE rate cut tomorrow. To give you some idea on how that impacted the UK bond markets, the 10 year Gilt note yield has risen more than 0.30% since the beginning of the month. It dipped below 4.2% on December 3. It has extended the rebound to around 4.53% yesterday, rising by around 0.10% on the day. Well, at 7am GMT this morning we get some more important UK data- the November CPI and RPI inflation reports. Both measures of UK inflation are widely expected to show prices rising again. If that is the case, it will completely erode any chance of a base rate cut tomorrow. So, higher UK interest rates are helping to support the Pound versus the dollar and yesterday the GBP/USD lifted to above 1.2725. It topped out at 1.2729 and later closed in the US at 1.2710. The range seen so far today ahead of those important releases has been covered by 1.2695 to 1.2723. The GBP/USD is currently trading at 1.2702