GBP/USD awaits UK CPI data amid December rate cut speculation

GBP/USD trades cautiously near 1.2650 ahead of today's crucial UK inflation report, with markets pricing in implications for the Bank of England's December rate decision. The UK CPI Y/Y is expected to moderate to 3.6% from 3.8% previously, while Core CPI Y/Y is forecast at 3.4% versus 3.5% prior. Governor Bailey has explicitly emphasized inflation data as a key determinant for potential December rate cuts, making today's release particularly significant for sterling traders. A softer-than-expected reading could increase rate cut expectations and weigh on the pound, potentially pushing GBP/USD toward 1.2600 support. Conversely, any upside surprise in inflation figures would likely strengthen the case for the BoE to maintain current rates, providing support for sterling. The pair faces immediate resistance at 1.2700, with the 50-day moving average at 1.2680 acting as a near-term pivot point for directional momentum.