Economists at Société Générale analyze GBP outlook ahead of the BoE meeting on Thursday. 

August seasonals bearish for GBP/USD, bullish for EUR/GBP

Suspense around the BoE rate decision on Thursday should keep sterling on a knife edge with price action before the announcement likely to depend on the US manufacturing ISM data today and ADP employment on Wednesday.

Prior decisions to raise rates this year have not been well received in general by the Pound. Three of this year’s four rate increases translated into a lower GBP/USD on the day. EUR/GBP rallied on four occasions.

Bearish seasonality stands out for the Pound in August with GBP/USD down in eight of the last ten years and EUR/GBP up seven times.