GBP/USD: Sterling Wobbles After Five-Day Winning Streak as Food Inflation Slows to 5%

British pound is looking weak at a 5-day peak near $1.27 as FX traders reevaluate their bets in a lowering-inflation environment.

GBPUSD pair wobbled in early Tuesday deals as economic data out of the UK shook up traders’ confidence in the British pound. The exchange rate hesitated to break through $1.27 after it had been pressing higher for five days straight, adding just under 1% for that time span.

• UK food inflation marked a pronounced drop for February as prices for meat, fish and fruit pulled back, giving shoppers a much-needed reprieve. The pace of food price increases fell to 5%, down from 6.1% in January. It was the lowest figure since May 2022, according to the British Retail Consortium.
• Looking ahead, the 

GBPUSD might be in for another shake-up, this time from the US side. FX traders will soon turn their attention to the upcoming personal consumption index report, or PCE. The index—the Federal Reserve’s favorite measure of inflation and for January—is expected to show price pressures moderated to 2.8% from 2.9% in the prior month.