Societe Generale: Sterling Faces Challenges Prior to BOE Rate Hike Decision

Economists at Societe Generale said they were bearish on GBP/USD and bullish on EUR/GBP due to August seasonality.

Suspense over Thursday’s Bank of England rate decision should keep GBP trading cautious, though ahead of the rate decision, price action for these pairs may depend on today’s US ISM manufacturing data and Wednesday’s ADP employment data.

The decision to raise interest rates this year has generally not been well received by the pound.

Three of the four rate hikes sent GBP/USD lower on the day.

EUR/GBP rallied four times.

Sterling has a markedly bearish seasonality in August, with eight losses against the dollar and seven gains in the euro over the past decade.