GBP Pairs in Focus Ahead of BoE Rate Decision Today

The British pound trades cautiously near 1.2950 against the USD and 0.8340 versus EUR ahead of today's Bank of England policy decision, the session's key event. Markets are pricing in a 65% probability of a 25 basis point rate cut, which would bring the UK base rate to 4.75%. Earlier European data showed mixed signals with Eurozone retail sales and construction PMIs offering little directional guidance. Switzerland's unemployment rate remained unchanged at 2.6%, keeping SNB policy expectations steady. GBP/USD faces immediate resistance at 1.2980 with support at 1.2920, while EUR/GBP hovers near 0.8350. A hawkish hold from the BoE could propel sterling higher across the board, targeting 1.3000 in GBP/USD. Conversely, a rate cut coupled with dovish forward guidance might pressure the pound toward 1.2880 support. Traders should monitor the vote split and Governor Bailey's press conference for clues on future policy trajectory.