Sterling extends rebound from lows; UK CPI next focus

* Sterling continues broad recovery from historic lows * UK CPI next, market also eyes BoE minutes Wednesday * Implied interest rate spreads support sterling rebound

LONDON, Nov 18 (Reuters) - Sterling clawed back more ground against major currencies on Tuesday, extending its rebound from historic troughs plumbed late last week as traders pared back positions ahead of key UK indicators this week.

The October consumer price report at 0930 GMT is expected to confirm analysts' and the Bank of England's view that inflation has peaked, and minutes on Wednesday from the BoE's last policy meeting will cast more light on the debate that resulted in a stunning 150 basis point rate cut to 3 percent.

Consumer price inflation is expected to have eased to a 4.8 percent annual rate from a 16-year high of 5.2 percent in September. ECONGB

Having driven the pound down to a record low last week against the euro, a six-and-a-half year trough against the dollar and a 13-year low on a trade-weighted basis, traders cut back their bets ahead of these reports.

"It was a bit stretched when it went to 86.60 (pence)," said Michael Hart, senior European FX strategist at Citigroup, referring to the euro's all-time high against sterling.

Still, Hart expects the weak UK economy, falling inflation, further aggressive BoE policy easing and worries about the banking sector to weigh heavily on sterling in the coming months.

"It's just positioning more than anything else because the backdrop remains overwhelmingly negative. The exposure of the UK to refinancing risk and the overstock of foreign currency liabilities is huge ... so all the signposts are still set for sterling weakness."