GBP Holds Ground Near $1.3200 Amid Hawkish Expectations

The British Pound (GBP) has seen some gains in early European session on Monday, reaching around $1.3245 against the US Dollar (USD). Despite market experts questioning a hawkish Bank of England (BoE) repricing, the GBP/USD pair is up 0.15%.

Strategists at Brown Brothers Harriman (BBH) highlight a disconnect between market pricing and their own expectations for the BoE policy path. They argue that 'the swaps curve continues to imply about 100bps of BoE rate hikes in the next twelve months to 4.75%', but believe 'the BoE may not need to tighten as much as markets expect.'

Meanwhile, the US Dollar trades marginally higher at the start of the week, with United States (US) Treasury Yields remaining elevated near the 19-year high of 5.23%. This week, investors will pay close attention to the US Nonfarm Payrolls (NFP) data for September, which will be published on Friday.

GBP/USD Technical Analysis shows that the pair holds below the 20-period exponential moving average (EMA) at $1.3387, maintaining a bearish near-term bias. The Relative Strength Index (14) sits near 28, in oversold territory, suggesting that while downside pressure dominates, the pace of the decline could start to moderate if sellers hesitate at lower levels.