GBP/USD bulls and bears battle it out at the start of week ahead of central banks, Fed, BoE

• GBP/USD bears are lined up ahead of the Fed and the BoE.
• The data has not been kind to the pound and there could be more to come this week. 

GBP/USD dropped on Friday due to the fears that the United Kingdom economy's slowdown may prompt the BoE that meets this week to slow down on its rate hike cycle sooner than originally thought. At the time of writing, GBP/USD is trading at 1.2390 and has travelled between a low of 1.2372 and 1.2404 so far.

The US Dollar is thinly spread in the open and not making a dominant impact on forex with the likes of the Aussie rallying yet the British Pound on the back foot. The week ahead will be busy with bot the BoE and Federal Reserve. For the BoE, it is expected to hike rates by 50 bp. ''However, nearly a third of the analysts polled by Bloomberg see a smaller 25 bp move''

''Indeed, WIRP suggests only 55% odds of a 50 bp hike, down from 85% at the start of last week, while odds of a 25 bp hike March 23 are no longer fully priced in,'' analysts at Brown Brothers Harriman said. ''After that, odds of a final 25 bp hike in June or August top out near 60% would see the bank rate peak near 4.5%. Recall that for the 50 bp hike at the last meeting on December 15, the 6-3 vote was surprising in that Dhingra and Tenreyro voted to keep rates steady and Mann voted for a larger 75 bp move. Updated macro forecasts will be released this week.''

As for the data, again, a thorn in the side for the Pound, the analysts said that  December consumer credit will be reported Tuesday as well as the final January manufacturing PMI  followed by final services and composite PMIs as the last data for the week. ''The data are likely to continue worsening as the full weight of monetary and fiscal tightening has yet to be felt.''