Sterling Stable at 1.35597 as Dollar's Carry Advantage Fades
The GBP/USD pair is currently trading at 1.35597, up 0.14% from its previous close of 1.35407. This stability can be attributed to the fact that the Bank of England's Bank Rate and the federal funds rate are both at 3.75%, effectively erasing the dollar's carry advantage.
According to analysts, sterling is not being bought on its own merits but rather held because the dollar has stopped being obviously better. This equilibrium is precarious and can be broken by any of three central bank events in the next eight days: Friday's U.S. CPI, next Tuesday's Fed decision, and the Bank of England on September 17.
The technical picture is neutral-to-cautious, with the pair consolidating between its 50-period and 200-period moving averages on shorter timeframes. The Relative Strength Index is in neutral territory, indicating a market waiting rather than deciding.