Sterling, Brexit and the Bank of England:
- Bank of England will policy unchanged, QIR may highlight weakening price pressures.
- Brexit clock ticking, and nothing has changed.
See how our Q1 Trading Forecasts for GBP can help you when trading.
Sterling Stable Ahead of BoE and QIR
The British Pound is little changed at the start of the week as investors wait for the latest central bank meeting and the Quarterly Inflation Report (QIR). All policy measures will be left untouched and the QIR is expected to show price pressures weakening, despite a strong jobs/wages market. Bank of England governor Carney will still try and outline how the central bank will react in various Brexit scenarios and he may hint at policy tightening measures IF Brexit is resolved.
Resolving Brexit remains unlikely as we stand but there is talk that the EU may offer some kind of guarantee over the Irish border that would help UK PM May sell her plan to Parliament. As always, nothing is set in stone and recent talk may just be commentators pushing the boundaries. Sterling remains stuck in a tight trading range and unless PMI readings on Tuesday are dire, or if No Deal Brexit reappears, the British Pound will remain in thrall to UK-EU negotiations.
GBPUSD Daily Price Chart (March 2018 - February 4, 2019)
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