GBP/USD Stuck in Tight Range Ahead of Fed and BoE Decisions
GBP/USD has been trading in a narrow range of 1.3525 to 1.3565 since Monday, following a 0.16% gain on Wednesday and a dip to an intraday low near 1.3482 on September 4.
The pair has lost its interest rate advantage over the dollar, as the Federal Reserve's target range of 3.50% to 3.75% is now identical to the Bank of England's Bank Rate at 3.75%.
Market pricing assigns a 62-64% probability to a Federal Reserve increase at the September 15-16 meeting, which would give the dollar a 25-basis-point edge and potentially undermine sterling's support.