GBP moves above 1.33 after BoE – Scotiabank decision

The BoE left policy on hold as expected for today’s policy decision. Sterling (GBP) is slightly firmer on hold, notes Shaun Osborne, chief FX strategist at Scotiabank.

BoE puts rate on hold

“Politicians were again divided over the decision, but the 8-1 vote was slightly cleaner than the 7-2 expected by markets. The swaps price in a small amount of BoE risk reduction in the balance of this year. Governor Bailey said the BoE should be able to cut rates “gradually” over time. There is no press conference today, but the Governor and MPC Mann are speaking tomorrow.”

“The pound (GBP) is a little firmer on the hold and split decision, but gains on the 1.33s decline take the cable to its highest level since March 2022. GBP finds firm support on weakness in the 1.3150 area and bounced back strongly from yesterday’s delay. session to retest area 1.33.”

“GBP maintains steady trend appreciation against the USD, supported by bullish alignment of trend strength oscillators on short, medium and long term charts. Key resistance is at 1.3330 (long-term retracement) before a return to the 1.35/1.40 area.”