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Forex: GBP/USD up ahead of BoE minutes and UK labor data

The GBP/USD weakened little before 08:00 GMT to retest the opening price of 1.5427 and even try out 1.5420 via spike low. However, as the London session unfolds, the pair is rising back towards its highs, already at 1.5440 (+0.09%).

UK labor market data is due to be released at 09:30 GMT, presenting us with claimant count change and rate, as well as ILO unemployment rate and average earnings.

The BoE meeting minutes will attract much attention, as it “should be pretty interesting after the considerable shift higher in the BoE’s latest inflation forecasts”, wrote TD Securities analysts. “There was likely a substantial debate on whether further QE was appropriate (we think that an 8-1 vote is likely, with Miles still voting for further QE), and perhaps on what other kind of tools the BoE could use to complement FLS”, said analyst Alvin Pontoh.

“We would allow for a small rebound towards 1.5520 ahead of further losses”, wrote Commerzbank analyst Karen Jones, targeting 1.5271/35, the 2012 low.

Italy Industrial Sales n.s.a. (YoY) decline 6.3% in Dec and MoM decrease 1.8%

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Forex Flash: Central banks in focus later today – UBS

Overnight, the euro continued to benefit from a consensus-beating ZEW report out of Germany yesterday. According to Research Analyst Gareth Berry at UBS, “Our economists note a strong correlation between this and manufacturing PMI (due Thursday), which offers scope for further euro upside.” Moreover, the Bank of England and FOMC minutes due out today will have an important bearing on our existing short Cable trade recommendation.
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