Pound Under Pressure: Markets Await Bank of England And SNB Decisions

The British pound remains under pressure following weaker-than-expected inflation data, which has reinforced expectations of further monetary easing by the Bank of England. Investors are staying cautious ahead of today’s policy meetings of both the UK central bank and the Swiss National Bank, which is affecting both GBP/USD and GBP/CHF.

The latest data published yesterday showed a slowdown in inflationary pressures in the UK. The annual consumer price index remained at 2.8%, while monthly price growth came in at just 0.2% compared with expectations of 0.4%. Core inflation also came in below forecasts, easing to 2.6% versus expectations of 2.7%. Additional signs of cooling price pressures came from a slowdown in the retail price index and weaker dynamics across several producer price indicators.

The easing of inflation pressures has increased expectations that the Bank of England could continue its gradual policy easing in the coming months. Although no change in interest rates is widely expected today, markets will focus on the accompanying statement, the voting split within the Monetary Policy Committee, and guidance on future policy steps.

GBP/USD

Yesterday, following Jerome Powell’s press conference, the pair fell sharply, renewing its recent low at 1.3300. If the 1.3300–1.3330 range, which has contained the pair’s decline for more than a month, turns into resistance, further downside towards 1.3180–1.3200 may follow. A break of the bearish scenario would require a sustained move above 1.3330.

Key events for GBP/USD:

• today at 09:00 (GMT+3): UK unemployment rate;
• today at 09:00 (GMT+3): UK average earnings (including bonuses);
• today at 15:30 (GMT+3): US Philadelphia Fed manufacturing index.

GBP/CHF

The GBP/CHF pair is showing a relatively modest decline. Price has found support at 1.0600 and is consolidating within the 1.0600–1.0650 range. A breakout from this range would provide clearer direction for the next move. A sustained move above 1.0650 could trigger a retest of the recent high at 1.0700, while a break below the lower boundary could lead to a deeper corrective decline.

Key events for GBP/CHF:

• today at 10:30 (GMT+3): Swiss National Bank interest rate decision;
• today at 11:30 (GMT+3): Swiss National Bank press conference;
• today at 14:00 (GMT+3): Bank of England interest rate decision.

Thus, the key drivers for GBP/USD and GBP/CHF today will be the Bank of England and Swiss National Bank decisions. Following weaker-than-expected inflation data, the market will be looking for confirmation of the UK central bank’s policy stance, while any shifts in expectations for future monetary policy could significantly influence GBP price action in the coming days.

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