The GBP/CAD currency pair extended losses on Thursday, pulling back from a 1-week high of 1.8744, ahead of the outcome of the Bank of England’s policy meeting and Canadian jobs data.
The Bank of England is expected to leave its benchmark interest rate intact at 3.75% at its February 5th meeting.
In December, the BoE reduced its policy rate by 25 basis points in a decision that revealed significant internal disagreement, with a 5-4 vote on the Monetary Policy Committee.
Four MPC members favored keeping the rate unchanged at 4.00%, highlighting ongoing divergence over the appropriate pace of easing.
The BoE had said that policy settings would follow a gradual downward trajectory rather than a sharp easing move. It said the scale of any additional rate reductions would depend on how the inflation outlook develops.
Inflation in the UK has remained well above the BoE’s 2% target, even after moderating in recent months.
While BoE officials still saw room for more rate cuts over time, they warned that subsequent decisions on easing were becoming a “closer call.”
Meanwhile, CAD traders will be paying close attention to Canadian labor market data due out on Friday for fresh clues over consumer spending strength.
Canada’s economy probably added 7,000 jobs in January, according to market consensus, following a job growth of 8,200 in December.
The unemployment rate in the country probably remained steady at 6.8% in January.
The GBP/CAD currency pair was last down 0.19% on the day to trade at 1.8612.
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