GBP/USD Grinds Lower on Near-Negligible Rate Differential

The GBP/USD pair is trading near 1.3500 on thin holiday volume, holding above its 50-day simple moving average at 1.3460.

With the Bank of England's Bank Rate at 3.75% and the Federal Reserve's target range at 3.50-3.75%, sterling carries a mere 12.5 basis point advantage over the dollar, effectively rendering it almost negligible.

The two major rate decisions scheduled for September 15-16 and September 17 will likely determine which bank moves first, resetting the pair in the process.

Consensus is leaning against sterling, with a 25-provider survey predicting a bearish outcome: a September projection of 1.3327 and a December figure of 1.3385.