The dollar gained against the Sterling at 13:30 BST following the latest US inflation report, which revealed inflation lowered to 8.3% in August, yet failed to meet analyst expectations of 8.1%.
The unexpectedly hot report sent the Pound spiralling from $1.17330 to $1.15593 at 14:00.
The Sterling was trading at $1.15804 at 14:50 as markets digested the figures.
Investors hoped a lower inflation rate might curb the US Federal Reserve’s hawkish stance on interest rate moves, however the slight fall in inflation confirmed fears the figure will come nowhere near dissuading the Fed from further aggressive rate hikes.
However, the prospect of higher rates served to send dollar strength higher, with the currency also gaining against the Euro, which dropped from $1.01765 to $1.00326.
