Sterling rose for a third consecutive day on Wednesday on hopes that Prime Minister Theresa May can avoid a no-deal Brexit though gains were capped before inflation data which might whittle down the probability of an interest rate hike next year.
Headline inflation data is expected to show a decline to 2.3 percent for the month of November from 2.4 percent previously and edging towards a 2 percent target in the coming years by the Bank of England.
A sharp fall in inflation might further weigh on market expectations of a rate hike. Money markets are pricing in an 80 percent probability of one interest rate hike next year.
The British pound gained 0.2 percent to $1.26661, moving further away from a 20-month low of $1.2477 hit last week. Against the euro, the pound was modestly weaker at 90.03 pence.
Source : Reuters