The British Pound extends the advance from earlier this week as European Union (EU) Chief Negotiator for Brexit Michael Barnier pledges to meet with U.K. officials within ‘hours or days’ to initiate a new round of talks.
The narrowing threat of a ‘hard Brexit’ may keep the British Pound bid ahead of the Bank of England’s (BoE) quarterly meeting, with the central bank widely anticipated to deliver a 25bp rate-hike on ‘Super Thursday.’ The fresh developments coming out of the BoE may boost the appeal of Sterling should Governor Mark Carney and Co. show a greater willingness to move away from the easing-cycle and implement higher borrowing-costs in 2018. As a result, GBP/USD may continue to retrace the decline from the 2017-high (1.3657) as the BoE starts to normalize monetary policy and lays out a more detailed exit strategy.
However, GBP/USD stands at risk of facing a more bearish fate if the Monetary Policy Committee (MPC) implements a dovish rate-hike and endorses a wait-and-see approach for 2018.
GBP/USD Daily Chart
USD/JPY initiates a fresh series of lower highs & lows even as the Bank of Japan (BoJ) sticks to its Quantitative/Qualitative Easing (QQE) Program with Yield-Curve Control, and the pair may continue to give back the advance from the September-low (107.32) should the Federal Reserve highlight a more shallow path for the benchmark interest rate.