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According to Reuters, sterling fell to $1.6050 from $1.6090 after inflation data results were around what they were expected to be.
Consumer price inflation was up to four per cent in January, which is what economists had predicted, compared to 3.7 per cent in December.
The news provider noted: "Stubbornly high inflation has been feeding into expectations of a rate hike in the near term, offering solid support to the pound."
What's more, this information resulted in March gilt figures reversing their early losses and turning positive.
They are now trading nine ticks up at 115.90, compared to being 14 ticks down at 115.67 previously.
This comes after the pound was up by 0.1 per cent against the dollar yesterday morning as there was further speculation the Bank of England could raise interest rates in May.
Posted by Greg Secker
