Stronger industrial sector activity reflected in UK data earlier this week helped lift the Pound Sterling (GBP) after spot found firm support in the mid-1.32 area, Scotiabank's Chief FX Strategists Shaun Osborne and Eric Theoret report.

Markets note BoE caution on rate outlook

"BoE MPC member Mann remarked yesterday that inflation 'persistence' was the main policy challenge for the central bank and that she would support a “more restrictive for longer” policy stance. BoE Economist Pill echoed that sentiment in remarks earlier today."

"Better UK data plus the likelihood of BoE remaining on hold through early 2026 at least should help underpin the pound. The intraday chart for GBP/USD also suggests the risk of some short-term softness, with the 6-hour chart indicating a minor top may be in place (via a bearish outside range signal that formed over the European morning session). "

"But Cable’s gains over the week are also delivering some positive signals on the weekly candle chart via a bullish 'engulfing' pattern. Shortterm losses towards the 1.34 or just below should remain supported. Resistance is 1.3470/75 ahead of a return to the mid-1.35s"