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The GBP/USD pair faced a shift in momentum following the release of UK CPI inflation data, which came in higher than market expectations, providing a fundamental boost to the Pound. Prior to this, the pair had traded around 1.3515 as the US dollar maintained strength amid geopolitical tensions. While analysts at BBH previously highlighted expectations for BoE rate cuts, the hotter-than-expected inflation figures may force a repricing of those bets. Meanwhile, the GBP/EUR cross retreated to 1.1480, with Rabobank noting that political risks continue to support the Euro. ING analysts also pointed to foreign investment inflows supporting the Euro's relative strength, as traders now weigh the impact of persistent UK inflation on the Bank of England's next policy moves.
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