GBP Stable Ahead of BoE Meeting as Markets Price in Tightening
Scotiabank strategists Shaun Osborne and Eric Theoret note that GBP/USD has remained relatively stable, extending its recovery from last week's lows. They expect a hawkish hold from the Bank of England (BoE) next week, with markets already pricing in tightening by November.
The upcoming United Kingdom trade and industrial data is set to increase risk for the pound on Friday. Next week's jobs and CPI figures will add to the anticipation leading up to Thursday's BoE meeting.
Osborne and Theoret expect a 25bpt rate hike at the next likely meeting on November 5th, with short-term rates markets already pricing in ~19bpts of tightening for that decision. They also highlight the importance of the budget scheduled for late October as a key factor in sentiment.
The pair notes that support has been observed in the upper-1.34s and that the RSI remains close to neutral, hovering just above the 50 threshold.