The Pound chose in favor of consolidation. Overview for 21.01.2020

GBPUSD started consolidating; the Brexit is 10 days away. 

The British Pound is getting less active against the USD as the Brexit approaches. The current quote for the instrument is 1.3011.

The closer January 31st when the Brexit procedure is scheduled to start. The less active the British Pound. It's quite likely that investors decided to save strengths until some more or less significant drivers and catalysts appear. 

Today, the United Kingdom is scheduled to report on its labor market in November and December. The Unemployment Rate is anticipated to remain unchanged at 3.8%. The Average Earnings Index may slow down a little bit and show only 3.1% 3m/y after being 3.2% 3m/y in the previous period. 

According to RBS, as time goes by, there is an increasing probability of decisive actions by the Bank of England during its January meeting. To give arguments for this, they mention economic stagnation in QoQ: earlier the country’s GDP lost 0.3% per month and the industrial production volumes leave much to be desired. Taken together, these factors draw a pretty disappointing picture when a weak tertiary industry and sluggish demand prevent the economy from holding its pace. In addition to that, the inflation pressure reduced in December, which is almost not a good signal for the British regulator. 

In fact, any possible measures to be taken by the BoE in January to revise its monetary policy would be against the regulator’s conservative stance. Still, it may be that the country’s economy really needs support right now.