GBP/USD awaits UK data
Over the last 48 hours GBP/USD has edged slightly higher as traders wait for the latest UK inflation report and average earnings to be released. Both of these will be used by the Monetary Policy Committee when they next meet to decide how ready the UK is for the interest rate to be increased. At the moment the markets are indicating that earnings will drop by 0.1% inferring we are further away, rather than closer to a change. As ever, the phraseology that accompanies these announcements will be of equal importance as the markets scrabble to get a handle on the likely start date.
It looks less likely that the UK will be in a position to start increasing interest rates in 2014, but next week’s MPC minutes and the voting will confirm that one way or another.