GBP price, Brexit news and analysis:
- Brexit is the principal focus for Sterling markets as the Internal Market Bill faces four more days of debate in the UK Parliament.
- The Bank of England monetary policy meeting Thursday could also impact the British Pound although no change is expected in interest rates.
- There’s plenty of UK data to process too, with inflation numbers due Wednesday after the release of a mixed bag of employment figures Tuesday.
GBP/USD stability likely to persist, heavy news agenda
GBP/USD and EUR/GBP are steadying after the British Pound’s recent losses, and that relative stability will likely persist over the coming week, which is dominated by Brexit, Thursday’s Bank of England monetary policy announcement and a slew of UK economic data.
GBP/USD Price Chart, Daily Timeframe (April 22 – September 15, 2020)
Chart by IG (You can click on it for a larger image)
As the chart above shows, GBP/USD has hardly moved after the UK’s Internal Market Bill passed its first hurdle late Monday, as expected. It now faces four more days of debate in the Westminster Parliament and lawmakers will likely try to amend it. However, Sterling seems unlikely to react strongly.
Similarly, the Bank of England’s monetary policy announcement Thursday should leave GBP/USD and EUR/GBP unscathed as the central bank will likely keep all its monetary policy levers unchanged, including Bank Rate at 0.1%.
UK inflation data next up
As for the data, UK labor-market figures released Tuesday were mixed, with the unemployment rate up but a lower than expected fall in the number of people in employment. Attention now turns to Wednesday’s UK inflation data, which are expected to show the headline inflation rate down to zero in August compared with July’s 1% increase year/year.
Read here how inflation affects currency rates
Against this background, GBP/USD will likely reflect movements in the US Dollar, which is currently under some downward pressure due to a general improvement in market sentiment after data suggesting that the Chinese economy is recovering.
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--- Written by Martin Essex, Analyst
Feel free to contact me on Twitter @MartinSEssex
