Cable is now seen slipping to the lows for the day at 1.2650, roughly down by 0.5% on the day. It has been a steady climb lower for the currency pair from around 1.2700 at the start of European morning trade. Is this a sign that traders are hedging their bets that the BOE will deliver just a 25 bps rate hike later on?
GBP/USD daily chart
The OIS market continues to indicate odds of a 25 bps move being at around 62% while odds of a 50 bps move are at around 32% currently. There will certainly be some upset parties if the BOE does deliver on the former without offering up too much hawkish connotations in their statement.
Going back to GBP/USD, this might turn the focus towards the end-June lows around 1.2590-60 before getting to the 100-day moving average (red line) at 1.2577 next.