Pound Sterling has climbed to near 1.2700 as hopes of an early rate cut by the BoE have waned.

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• Pound Sterling has climbed to near 1.2700 as hopes of an early rate cut by the BoE have waned.
• UK Inflation remains stubbornly high due to higher fuel costs and seasonal airfare prices.
• Investors await the UK Retail Sales data for further guidance.

The Pound Sterling (GBP) recovers swiftly as stubbornly high UKConsumer Price Index (CPI) data for December has pushed back expectations of early rate cuts by the Bank of England (BoE). The GBP/USD pair is expected to witness more upside as investors hope that the Federal Reserve (Fed) will start reducing interest rates earlier than the BoE.

BoE policymakers are expected to remain on their toes as the UK economic outlook is vulnerable and price pressures are significantly stubborn. Going forward, the Pound Sterling will be guided by the Retail Sales data for December, which is set to be released on Friday. Upbeat consumer spending data would further diminish hopes of an early rate cut by the BoE.

Pound Sterling has delivered a sharp recovery to near 1.2700 after discovering strong buying interest around a fresh monthly low of 1.2600. The GBP/USD pair recovered sharply after testing the 50-day Exponential Moving Average (EMA), which oscillates around 1.2620. The Cable is struggling to shift auction above the 20-day EMA, which trades around 1.2700.

The 14-period Relative Strength Index (RSI) has shifted into the 40.00-60.00 range, which indicates a listless performance.

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