The UK pound stumbled on the March inflation data on Tuesday, which showed the consumer price rise slowed more than expected in the month even as the producer price deflation did not worsen as expected.
GBP/USD fell to 1.4603 from the previous close of 1.4675, reversing much of the 0.75% move off Monday's five-year low of 1.4565. A new multi-year low is now just a few pips away for the pair.
The core CPI inflation eased to 1% from a year earlier in March vs February reading of 1.2%, which analysts had been expecting to repeat. The DCLG house price index slowed to 7.2% from 8.4%, while the consensus was for a rise to 8.7%.
The next important data from the UK is the March labour market data due on Friday. The claimant count is forecast to have to a dropped to a fall of 28,000 from 31,000 in February while the ILO unemployment rate for the three months to March may have fallen to 5.6% from 5.7%.
The growth of average earnings excluding bonus may have increased to 1.7% from 1.6%, while that including bonus is forecast to have stood at 1.8% in March.
Meanwhile, the year-on-year factory gate deflation stood at 1.7% in March when the market had been expecting a reading of -1.8%. The retail price index also eased to 0.2% from 0.5% trailing consensus of 0.3% growth.
Against the yen, the Sterling fell to a five-month low of 174.88, its lowest since 31 October last year, and from Monday's close of 176.29. EUR/GBP rebounded to 0.7229, moving off a near one-month low of 0.7180, touched earlier in the day.
Koichi Hamada, an adviser to Japanese Prime Minister Shinzo Abe, said on Monday that the country's monetary policy is working and the yen is weak in terms of purchasing power. The comments eased speculation the Bank of Japan will expand its stimulus programme, and pushed the Japanese currency up across the board.
Markets will weigh the impact of the US retail sales data due later on 14 April, amid increasing speculation that the FOMC is nearing its first rate hike since 2006.
China's GDP data scheduled for Wednesday will also be crucial for global markets as investors might see the slowing down of the second largest economy as a call to turn more towards the dollar assets.
Analysts have forecast a rebound in US retail sales to 1.1% on month in March from a 0.6% fall in February, while China's annual GDP growth is forecast to have eased to a new multi-year low of 7% from the five-year low of 7.3% in the fourth quarter of 2014.