Big Morning for GBP
Today’s calendar is dominated by this mornings UK labour market data and the January Monetary Policy Committee meeting minutes.
If we see a fall/improvement in the unemployment, this should be GBP-positive, given the labour market’s central role in the BoE’s forward guidance. In the BoE minutes, the market focus will be on any indications of concerns about inflation as growth picks up. As explained in yesterdays news, this effectively implies when we may see an interest rate increase and directly impacts the price of GBP
Towards the end of the day we have the Bank of Canada policy meeting. It is likely to leave its policy rate unchanged. However, more dovish forward guidance will likely add further downward pressure on the CAD. Trading above 1.80, GBP/CAD is already at a 4 year high!