The Pound Sterling came under heavy pressure against the greenback and Euro after a policymaker from the Bank of England confirmed over the weekend that he was in favor of an imminent rate cut. Gertjan Vlieghe cited the UK's weakened economy as the rationale for the dovish posturing. Mark Carney, the Bank of England Governor, had similarly said last Thursday that the central bank was prepared to move if the economy in 2020 seemed just more of the same. Today's release of disappointing data, specifically November's GDP at -0.3 against an expected 0%, and manufacturing production in November falling to -2%, worse than the projected -1.7%, also negatively impacted Sterling.
As of 6:36 am in London, the GBP/USD was trading lower at $1.2980, down 0.6103%; the pair is moving off the session trough of $1.29607, while the high was at $1.30744. The EUR/GBP is up at 0.8564 Pence, a gain of 0.5825% and off the earlier high of 0.85769 Pence.
Markets Await BoE Reaction
The next policy meeting of the Bank of England will be held on January 30th, just prior to the Brexit deadline and the official uncoupling of the UK and the European Union. As the members of the BoE's Monetary Policy Committee have expressed concern about how the Brexit would impact the UK economy, FX players are anxious to hear how the latest data could force the hand of the more dovish members who are in favor of a more accommodating monetary policy.