GBP eased against most other major currencies in the European session on Monday as investors prepared for the announcement of the Bank of England’s policy decision later this week.
The pound firmed slightly against EUR and USD but weakened against the rest of its major rivals.
Thursday will bring the eagerly-anticipated announcement of the BoE. While the British central bank is widely expected to leave its Bank Rate unchanged this week, markets will look for signals on a near-term path for its key rate.
In the wake of the recent reports underscoring the weakening economic environment in the UK, investors continue to bet that the BoE will have to ease the monetary policy in the coming months. However, the timing of the start of the easing cycle remains a crucial question for markets.
It should be noted that the BoE’s policy update will follow the Federal Reserve's policy announcement on Wednesday. Markets expect no change in the Fed’s current policy settings this week.