January 29, 2020 / 9:40 AM / 20 days ago

Sterling in sight of weekly low a day before rates decision

* XGraphic: World FX rates in 2019 tmsnrt.rs/2egbfVh

* Graphic: Trade-weighted sterling since Brexit vote tmsnrt.rs/2hwV9Hv

By Yoruk Bahceli

LONDON, Jan 29(Reuters) - Britain’s pound remained in sight of one-week lows against the dollar on Wednesday on the eve of a knife-edge rate decision by the central bank.

The Bank of England is due to announce its rate decision on Thursday, which has pushed the pound down this month after a series of dovish statements by policymakers led to speculation that an imminent rate cut could be likely.

British house prices rose in January at their fastest annual rate since November 2018, adding to signs of economic confidence since December’s election that have prompted money markets to scale back their expectations of a rate cut.

Money markets currently price a 46% chance of a 25 basis point rate cut to the BoE’s 0.75% policy rate - compared to around 70% at the start of last week.

The pound fell 0.1% against the U.S. dollar in early London trade at $1.3012. It was up 0.1% against the euro at 84.50 pence.

“We’re just really going to be range-trading ahead of the Bank of England tomorrow,” said Adam Cole, chief currency strategist at RBC Capital Markets.

“OIS pricing is pretty much 50-50, so we should see a decent reaction whatever outcome,” he added.

The British government said it will introduce a bill into parliament on Wednesday for legislation to end automatic rights for European Union vessels to fish in UK waters.

The development comes as talk that the EU wants UK fishing rights in exchange draws the industry into a political struggle between the bloc and its departing member.

Britain will have to compromise on issues such as consumer rights and environment protection if it wants to maintain full access to the European Union’s single market, German Foreign Minister Heiko Maas said on Wednesday. (Reporting by Yoruk Bahceli, Editing by William Maclean)

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