Waning risk appetite in the market enabled the dollar to pull back early losses against the pound

Having enjoyed a slight rally in early trading, demand for the pound eased enabling the US dollar to recover with the price closing the day little changed at 1.6810.

• Sterling edged back up towards a three-month high in European trading hours after a key reading of annual UK inflation accelerated for the first time in eight months in October .
  
• The pound nudged up to an intraday high of $1.6872, a shade below its highest point since August this year, after the annual consumer price inflation rate hit 1.5%, in line with economists' expectations.
  
• The figures fuelled the view that the Bank of England might be coming close to the end of its quantitative easing programme after announcing a £25bn extension to its assets purchase scheme at its policy meeting earlier this month.
  
• However, the US dollar recovered its losses as risk appetite wavered in the wake of subdued global equities. Analysts also noted that the dollar's gains were a result of a delayed reaction to rare comments on the depreciation of the US currency from Ben Bernanke.
  
• In trading this morning, the pound is marginally down as investors await the release of the minutes from the BoE's latest policy meeting at 09:30.