Forex: GBP/USD slightly offered but holds steady ahead of BoE

<!--TITOL:

Forex: GBP/USD slightly offered but holds steady ahead of BoE

FITITOL--> FXstreet.com (San Francisco) - GBP/USD encountered selling pressure on Tuesday that extended into the Asian session this Wednesday, as market participants scaled back their appetite for risk across the board due to fresh concerns about the fragility of Europe’s monetary union.

The pair managed to trade a limited range between 1.6126 and 1.6159 in Asia, and is last quoted in the 1.6135 area from 1.6156 at the session opening. But the sterling may hold steady ahead of Thursday’s Bank of England interest rate decision, says David Song, Currency Analyst at DailyFX.

“As the Monetary Policy Committee turns their attention to the stickiness in underlying inflation, we expect to see the BoE conclude its easing cycle in 2012 and the central bank should start to lay out a tentative exit strategy as the MPC adopts a hawkish tone for monetary policy," comments Mr. Song.

In the European session ahead, very little is on the economic docket which would influence risk i n GBP, so GBP/USD is expected to operate in consolidation mode as investors remain sidelined ahead of tomorrow’s rate decision.