The British monthly GDP is announced on Friday at 09:00 MT time.
Will the BOE manage to keep the GBP standing?
The Bank of England’s interest rate announcement and monetary report will be out at 14:00 MT on January 30.
2020 will be a difficult year for the GBP. Brexit deadlines are coming, concerns about the British economy have increased – all this creates a negative environment for the British pound. The BOE maintained the key rate at 0.75% in December and is likely to do so once again on January 30. However, the question is not whether there will be a rate cut, but rather, whether the policymakers incline towards it or not. Two out of nine members of the bank’s Committee voted for a cut during the last two meetings. If the number of rate cut supporters increases at the January session, it will mean that the central bank will actually lower the rate at some point this year. That will be especially likely, given the uneasy context of the UK-EU divorce. All in all, let’s wait for Thursday and read into the details.
- If the support of a rate cut grows within the BOE Committee, the GBP will drop.
- If the BOE Committee remains firm on keeping the rate unchanged, the GBP will rise.
The European Central Bank will publish the monetary policy statement with the interest rate decision on January 21, at 14:45 MT time.
Joe Biden is going to unveil a Covid-19 relief package of about $2 trillion. After this announcement, the 10-year Treasury yield rose, adding support for the USD.
The US dollar’s weakness offered a boost to emerging-market currencies and oil.