The British economy lacks fundamentals today, where eyes will be on BoE minutes for April’s rate decision, due later in the week, which included no change in the bank’s monetary policy. Thus, the movements of the royal pair will largely be directed by data from the US, as building permits and housing starts for March are expected to record 1.1% advance from 8.2% drop and 8.6% rise from 22.5% fall respectively, as of 12:30 GMT.
Still, the pound is showing some weakness after dropping last week versus the green currency as the BoE left interest rate and APF quantity steady, while inflation slowed down to 4.0% from 4.4%, raising speculation the BoE will not raise borrowing cost. However, MPC member Andrew Sentance said that inflation will exceed 5% due to the sterling’s weakness.
On the other hand, the dollar is not able to push the pair’s direction strongly to the downside as the Fed also left interest rate at its low range and resume the bond-purchase program that will expire in June.
The outlook of the pair will largely depend on the data released by both economies, yet the main direction of will probably be affected by interventions of both central banks.
Written by ForexMansion.com