GBP/USD Daily Outlook for April 20, 2011

The main highlight today will be on BoE minutes for April’s rate decision which included no change in monetary policy as policy makers opted to leave both interest rate and APF steady at 0.50% and 200 billion pounds.

Minutes for April’s rate decision will show how the voting came, where expectations show that there will be a three-way split as the previous few months.

Further split among policy makers may weaken the pound as it will increase skeptics with regard MPC member’s ability to shore up the economy amid the undergoing dilemma with the high inflation and drop in growth.

Yesterday, the pair showed some downside tendency to continue dropping for the third day, where the uncertain outlook for the British economy may cause the pair to move south.

On the other hand, the US will release existing home sales for the month of March, where expectations refer to 2.5% rise compared with the preceding 9.6% drop in February, as of 14:00 GMT, where an improvement in US data supports the downside direction.

Amid the absence of intervention from the British and US central banks, the improvement in data and how investors believe which economy will recover first will determine the pair’s direction.

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