GBP Rebounds from Lows as Traders Await BoE Decision
The British Pound (GBP) has staged a modest recovery from its lowest level since July 30, reaching around 1.3375-1.3370 against the US Dollar (USD). The GBP/USD pair seems to have snapped a three-day losing streak, but spot prices have only capitalized on the momentum beyond the 1.3400 mark.
The Bank of England's (BoE) policy update is expected today, with market players pricing in at least one 25-basis-points rate hike by the BoE in 2026 amid inflation risks stemming from higher energy prices. The focus will be on the MPC vote distribution and forward guidance, which could provide a fresh impetus to the GBP/USD pair.
A modest pullback in US Treasury bond yields has triggered some US Dollar profit-taking, supporting the currency pair heading into the key central bank event. However, the US Federal Reserve's (Fed) hawkish tilt and escalating Middle East tensions continue to act as a tailwind for the safe-haven USD, capping the GBP/USD pair.