The GBP/USD fell further on Tuesday, dropping clearly below the 1.3100 level and losing around 0.9% for the day. This decline continues a troubling trend for the British pound, which has often ended lower against the US dollar over the past month—only managing to close up in a couple of instances among the last twelve trading days. It’s racing toward its third straight week of decline.
This week, there’s not much to look forward to in terms of UK statistics until the Bank of England’s interest rate decision on Thursday, which, honestly, is likely to stay the same. The Monetary Policy Committee is expected to vote 6-3 to hold interest rates steady. But, the potential for another dissenting vote on rate cuts is something that may catch the attention of those who closely follow central bank policy. Still, with the UK’s headline inflation stuck at 3.8% as of August—almost double the Bank’s target of 2%—any significant shift in rates seems unlikely.
On the US side, the ADP employment change numbers for October are set to be released on Wednesday. Historically, the ADP data hasn’t correlated well with the official figures, but I doubt that will stop investors from putting significant weight on these volatile numbers, especially as the ongoing U.S. government shutdown limits access to more substantial data like the Nonfarm Payroll report.
