GBP/USD: bulls set back by CPI drifting - Scotiabank

GBP is weak, down 0.4% vs. the USD and underperforming all of the G10 currencies on the back of weaker than expected CPI data with core drifting back below 2% and headline CPI softening to 2.4% y/y from 2.7% (vs. 2.6% exp.). 

Key Quotes:

"The CPI disappointment has delivered a full reversal of Tuesday’s wage-driven gains and forced a renewed softening in BoE rate expectations back toward levels observed on Monday."

"Focus now turns to this evening’s meeting between PM May, EU Council President Tusk, and EU leaders ahead of Thursday’s Summit. GBP appears vulnerable as we note the absence of any meaningful support between 1.3100 and 1.3020-1.3000 area."