GBP Trades Higher Amid UK Data-Packed Week and BoE Policy Announcement

The British Pound (GBP) started the week trading higher against its major currency peers, except for North American currencies. The UK data-packed week and the Bank of England's (BoE) monetary policy announcement are in focus. The GBP is up 0.14% at around 208.00 against the Japanese Yen (JPY).

This week's key events include the UK employment data for three months ending July on Tuesday, followed by the Consumer Price Index (CPI) data for August on Wednesday. The BoE will then announce its interest rate decision on Thursday. Both employment and inflation data are expected to have a significant impact on the BoE's interest rate expectations.

According to Societe Generale, the strong UK monthly Gross Domestic Product (GDP) data for July has kept BoE interest rate hike expectations alive. The bank notes that the surprise July GDP gain of 0.4% could mean a close call for the BoE next week, potentially sharpening the debate over near-term policy moves.

Meanwhile, strategists at HSBC believe markets are increasingly pricing a quicker normalization of Japanese monetary policy. They point out that investors now expect the Bank of Japan to tighten policy faster than it has done in recent years.