GBP Traders Face Muted Expectations Ahead of BoE Meetings

The British Pound (GBP) has been trading flat against the US Dollar (USD), but softer on crosses, according to Scotiabank's Global FX Strategy team. The UK PMI data offered little new insight into the market. Markets are pricing in minimal tightening for the September Bank of England (BoE) meeting and modest moves for November.

BoE Chief Economist Pill is scheduled to speak at 11am ET, which may bring some headline risk ahead of Governor Bailey's speech tomorrow. The current BoE rate expectations remain muted for the September 17th meeting, with only 4 basis points (bpts) of tightening priced in.

The November 5th meeting is priced for 18 bpts and will also be an Inflation Report/forecast meeting following the government's Autumn Statement/budget scheduled for October 28th. UK-US yield spreads remain supportive after this week's surge, which may have some impact on the pound's value.

The GBP's technicals are neutral to bearish, with a Relative Strength Index (RSI) 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.