GBP has underperformed in Q2 to-date, being the 2nd worst performing G10 currency. We see scope for catch-up with the markets concluding the BoE outlook is too pessimistic leading to sooner taper speculation and the prospect of short-term rates drifting further higher, helping support GBP. EUR/USD is pressured under 1.2150 amid the greenback’s strength and ahead of new economic forecasts from the EU. The headline Consumer Price Index is set to leap to 3.6%, a multi-year high, while Core CPI – which excludes food and energy – is forecast to advance from 1.6% to 2.3% YoY. Nevertheless, that would put it pre-pandemic levels, when inflation was considered healthy. The dollar index was up 0.2% at 90.287, just above Tuesday’s low of 90.130, seen for the first time since Feb. 26. USD/JPY rose 0.2% to 108.83, while AUD/USD fell 0.5% to 0.7804 and NZD/USD dropped 0.6% to 0.7234, with the commodity currencies cooling off after recording recent ten-week tops. Investors now await the latest U.S. consumer inflation data, due at 1330 BST, which is expected to show a 3.6% lift in year-on-year prices, boosted by last April’s low base.