GBP Faces Hawkish BoE Decision Amid Risk-Off Environment

The British Pound (GBP) has been softer against the US Dollar but still outperforms most G10 currencies in a risk-off environment. Markets expect a hawkish hold from the Bank of England on Thursday, with a possible 25 bp hike in November.

Scotiabank strategists Shaun Osborne and Eric Theoret point to supportive UK-US yield spreads as a reason for the pound's resilience. They note that despite some softness, sterling still has technical support around 1.3450-1.3420, with resistance above 1.3550.

The analysts also mention that fundamentals remain supportive, and the medium-term risk event is the fall budget scheduled for October 28. In terms of immediate market attention, they highlight Thursday's BoE meeting as the key focus point.