The Pound Sterling (GBP) is firm but little changed on the day, Scotiabank’s Chief FX Strategist Shaun Osborne notes.  

UK CPI data tomorrow may show hot services prices

Aside from the Fed decision tomorrow, UK markets will have to negotiate UK August CPI. Headline inflation is expected to remain at 2.2% over the year but firm core prices and— especially—service sector inflation (expected to pick up to 5.6% in the August year, from 5.2%) suggest BoE policymakers will sit on their hands at Thursday’s policy decision and leave the policy rate at 5.00%.

“Sterling looks comfortable trading on a 1.32 handle on the charts. Cable gains are backed by solidly bullish trend strength oscillators which should mean limited scope for counter-trend corrections and ongoing pressure for gains to develop and retest the recent peak at 1.3266 (and beyond). Support is 1.3155/60.”