The British pound jumped close to 250 pips against the greenback today on the combination of US dollar weakness and the expectation that the minutes from the most recent monetary policy meeting will be hawkish.
If you recall, the Bank of England left interest rates unchanged at their last meeting. We expect more members to support the decision to pause, which would be a departure from the 6-2-1 vote from the meeting prior. When the BoE last reduced interest rates by 25bp, 6 members supported the move, 2 members preferred to leave interest rates unchanged and 1 called for a larger rate cut. The voting record will be critical to the sustainability of the pound’s rally.
