The Pound Sterling (GBP) continues to trade on the strong side. Dollar softness is the dominant theme and we have yet to have much bearish sterling news at all, ING’s FX strategist Chris Turner notes.

GBP/USD may head back to the 1.3240/60 area

“Away from the Fed, the biggest event risk for sterling this week is Thursday's Bank of England meeting. So far, the BoE has avoided any forward guidance on the easing cycle. It is unclear whether this will change on Thursday. Instead, a softer BoE profile for rates may have to be driven by the data, rather than being led through central bank communication.”

“Here, Wednesday's release of services inflation data for August may have a greater say in the matter. With greater confidence growing in the dollar's downside, GBP/USD looks like it may want to head back to the 1.3240/60 area short term.”