Meanwhile, the pound is weighed down by Brexit anxieties today, as Theresa May faces another possible defeat in Parliament, with some Tory Brexiteers refusing to back the government over her EU withdrawal deal.
Going back to the US, January’s Consumer Price Index has been released, and while it showed better-than-forecast growth, rising by 1.6 percent, it was the smallest gain since June 2017.
The Index excluding food and energy showed 2.2 percent growth in a year, and rose by 0.2 percent for the third month in a row, increasing the likelihood that the Federal Reserve may resume its path of rate hikes earlier than expected.
Following these releases, the GBP/USD exchange rate slipped, with Rodrigo Catril, Senior Currency Strategist as NAB noting: “The trend in core US inflation remains steady, against some concerns of a potential decline […] Overall the data suggest that we cannot rule out a resumption of Fed rate hikes later in the year.”
The pairing is likely to see movement this afternoon when the US retail sales data for December is due for release.
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Markets will be watching closely for signs that growth in the sector is slowing, amidst concerns that the US consumer is “tapped out”.
Brexit continues to be the main catalyst for the movement of the pound today, with Sterling likely to see movement following the parliamentary debate and vote scheduled for later on.
Although as the vote is not the “high noon” it was previously billed as, the pound may not be as volatile as expected, with Theresa May promising another vote in a fortnight.