British Pound: Range-bound against US Dollar with muted BoE pricing – Scotiabank

Scotiabank’s Global FX Strategy team reports the British Pound (GBP) is flat versus the US Dollar (USD) but softer on crosses, with UK PMI data offering little new insight. Markets price minimal tightening for the September Bank of England (BoE) meeting and modest moves for November. GBP/USD technicals are neutral to bearish, with support around 1.3500–1.3450, though the broader trend from June remains bullish.

Muted BoE expectations cap Pound

"GBP/USD (1.3493) The pound is trading flat to the USD while showing minor relative losses against most of the G10 currencies. The UK’s final services and composite PMI’s delivered modest expansionary prints in the low 50s, offering little in terms of the fundamental narrative. "

"BoE Chief Economist Pill is scheduled to speak at 11am ET, offering the potential for headline risk ahead of Gov. Bailey’s speech tomorrow. BoE rate expectations remain muted for the September 17th meeting, with only 4bpts of tightening priced."

"The November 5th meeting is priced for 18bpts and is also an Inflation Report/forecast meeting and thus should provide for a more fulsome analysis as it will also follow the government’s Autumn Statement/budget scheduled for October 28th. UK-US yield spreads remain supportive following this week’s surge."

"Neutral/bearish—the GBP’s technicals remain relatively lackluster with an RSI that is showing signs of stabilization, but at bearish sub-50 levels in the mid-40s. Short-term price action suggests important support at/just below 1.3500, with additional support expected closer to 1.3450. The medium-term trend from June remains bullish however."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)