Pound Edges Higher Ahead of Inflation Data Release

The pound sterling continues its upward trend, reaching for $1.36 as investors await the UK's inflation data release on Wednesday.

Traders are eyeing the upcoming Consumer Price Index (CPI) report, which is expected to show a slight easing of inflation to 2.5% from 2.6%. This forecast comes despite ongoing chaos in oil markets and surging prices, with Brent crude near $90 creating additional upside risk for Britain's energy imports.

The Bank of England anticipates inflation will reach approximately 3.2% by the fourth quarter, and a hotter CPI print could strengthen expectations of a September interest rate hike. This would likely lift the pound, particularly if services inflation also accelerates.