GBP Steep Downtrend

However, if the minutes from the last MPC meeting are any guide, a cut may not be close at hand. An 8-1 vote to keep rate unchanged at 5.50 percent was delivered as policy officials forecasted inflation possibly breeching 3.0 percent, even though GDP could slow “possibly quite sharply.” And, while the faltering in the domestic housing market and quickly cooling US economy threatened to stunt UK growth in the future, the advanced reading of fourth quarter growth suggested the economy wasn’t struggling just yet.

According to the government’s data, annualized expansion slowed to a 2.9 percent clip, the slowest in nearly a year. However, most of the major sectors were still reporting reasonable growth.

Ultimately, though, with economic and sentiment trends vying for control of the pound, the GPBUSD would finally break an eight-week falling trend channel in a move through 1.98. Whether or not this trend can be sustained though will fall once again to scheduled and unscheduled event risk this week.

The economic docket won’t have the same top tier market movers as last week, but a few indicators will certainly impact fundamental flows: the Nationwide housing inflation report will add insight to the Rightmove figure, the GfK consumer sentiment survey will offer a forecast for spending trends and a factory PMI number will take the temperature of the business sector. Looking beyond the calendar, risk trends will almost certainly be a factor for the high-yielding pound again as all eyes will be on the FOMC’s rate decision and US fourth quarter growth numbers to see if the US will usher in a global economic slowdown and rate easing policy