GBP/USD awaits UK CPI data with inflation expected to ease to 3.4%

GBP/USD holds steady near 1.2720 ahead of the UK's May inflation report, with markets anticipating a deceleration in price pressures. Economists forecast headline annual CPI to drop to 3.4% from April's 3.5%, while core inflation is expected to decline more sharply to 3.5% from 3.8% previously. The data carries significant weight for Bank of England policy decisions, as persistent inflation above the 2% target maintains pressure for hawkish monetary stance. A softer-than-expected reading could trigger sterling weakness, potentially pushing GBP/USD toward support at 1.2680. Conversely, any upside surprise in inflation figures would likely boost the pound, with immediate resistance seen at 1.2750. The BoE's challenge remains balancing inflation control against economic growth concerns, making today's release crucial for determining the central bank's next policy moves and sterling's near-term trajectory.