GBP Consolidates Ahead of Central Bank Decisions
The British Pound (GBP) has been consolidating above the psychological mark of 1.3500 against the US Dollar (USD) at the start of this week, but traders seem hesitant to place aggressive bets due to upcoming central bank event risks.
The US Federal Reserve and the Bank of England are scheduled to announce their monetary policy decisions on Wednesday and Thursday respectively, with market expectations pointing towards a 25 basis points rate hike by the Fed.
Recent developments in the Middle East have also contributed to a safe-haven bid for the USD, which has kept a lid on the GBP/USD pair. However, the Pound draws support from last week's better-than-expected UK GDP report, showing that the economy expanded 0.4% in July.
Traders now look to this week's UK jobs report and inflation data for short-term impetus, but expectations that the BoE will leave rates unchanged at 3.75% hold back GBP bulls from placing fresh bets.