British Pound Rallying Ahead of Bank of England Minutes

We are expecting the minutes from the latest monetary policy meeting which typically causes sharp volatility in the British pound. However the minutes tomorrow may be less exciting since Bank of England Governor King delivered the Quarterly Inflation Report last week. He was more worried about growth and less concerned about inflation leading some traders to believe that the central bank may cut interest rates in the first quarter. The minutes from the last meeting should contain a similar view but any risk would be to the upside. The British pound performed very well today thanks to a sharp rise in factory orders according to the CBI industrial trends survey. Money supply growth and mortgage approvals were softer and public sector net borrowing was narrower than expected.