Sterling rose in European trade on Wednesday for the first time in four days against the dollar, holding above the psychological level of $1.24 away from recent five-month lows.

The gains came after hot UK inflation data, which surpassed estimates in March, and underscored the inflationary pressures on the Bank of England.

The data hurt the odds of a UK interest rate cut in June ahead of BOE Governor Andrew Baileys speech later today, expected to include important clues on the future of UK monetary policies.

GBP/USD

The GBP/USD rose 0.2% today to $1.2447, with a session-low at $1.2417.

The pair closed down 0.15% on Tuesday, the third loss in a row, plumbing a five-month trough at $1.2405 following UK labor data.

UK Inflation

Earlier government data showed UK inflation rose 3.2% y/y in March, after rising 3.4% in February.

Core prices rose 4.2% y/y in March, above estimates of 4.1%.

UK Rates

The odds of a UK interest rate cut in June tumbled to 45%, with an 85% probability of such a cut in August.

Bailey

Bank of England Governor Andrew Bailey will speak later today in Washington on the state of the economy and monetary policy.