The Pound Sterling (GBP) is a middling performer among the major currencies on the session, Scotiabank’s Chief FX Strategist Shaun Osborne notes.

GBP gains modestly, capped around 1.26

“Bank of England (BoE) DG Lombardelli’s first speech since joining the Bank earlier this year emphasized caution in easing rates amid signs that wage growth trends remain sticky. The remarks follow similarly cautious comments from Governor Bailey last week.”

“Swaps pricing continues to reflect market expectations that the BoE will remain on hold in December but will likely resume easing—cautiously—in early 2025.”

“The GBP gapped higher over the weekend and while the rebound is challenging the short-term resistance (minor trend off the early November high at 1.2610), it is not doing so all that aggressively. Some drift back to the low 1.25s—to fill the overnight gap—may be needed before the GBP can push higher and perhaps see a minor relief rally towards 1.27/1.28.”