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12.01.201522:29:05UTC+00British pound stumbles before inflation data

The British pound declined to an 18-month low versus the US dollar Monday, a day ahead of inflation data, keeping pressure off the Bank of England to increase interest rates the soonest time possible.

If inflation dropped, it would also amplify bets the BOE would wait until the 2nd quarter of 2016 before raising interest rates.

Push back in rate hike projections helped drive sterling to an 18-month trough of $1.5034 last week.

On Monday, the pound was close to last week’s low at $1.5119, down 0.3%. Against the euro, the currency was flat at 78.07 British pence.

"The obvious is going to happen tomorrow in terms of inflation below 1%," said Derek Halpenny, European Head of Global Markets Research at Bank of Tokyo-Mitsubishi UFJ.

Sterling has already fallen nearly 3% versus the greenback this month as a bunch of weaker than awaited economic data has pushed back additional expectations on the timing of BOE’s rate hike. 

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