Important events today:

12:00 UTC – GBP: – Bank of England interest rate decision

14:15 UTC – GBP: – Speech by Bank of England Governor Bailey

15:00 UTC – USD: – ISM Manufacturing Employment Index

GBP/USD remains within a trading range between 1.2600 and 1.2800 in the early Asian session on Thursday. Later in the day, the Bank of England (BoE) will announce its interest rate decision, which is expected to maintain its monetary status quo. The major pair is currently trading near 1.2678, having gained 0.04% on the day.

The Federal Open Market Committee (FOMC) unanimously decided to keep the benchmark federal funds rate at 5.25-5.5% for the fourth consecutive month.

The committee will exercise patience to ensure that inflation remains firmly within the 2% target range. Fed Chairman Jerome Powell has closed the door on the possibility of a rate cut in March, but markets continue to view the May FOMC meeting as the most likely time for the Fed to begin easing policy.

As for the British pound, the Bank of England is expected to leave interest rates unchanged at 5.25% on Thursday. Nevertheless, investors will keep an eye on the policy outlook and look for hints of future rate cuts. The labor market is showing signs of rebalancing, but the vulnerable economic outlook could be a factor that will force Bank of England policymakers to discuss a rate cut. This, in turn, could put pressure on the British pound.

Recommendations: At the level above 1.2700 we consider buying.