GBP/USD remains in familiar ranges, but BoE is a major focus now

• GBP/USD bears capping the bull's advances in a familiar sideways channel. 
• The focus is on the BoE for the foreseeable future. 

At 1.2247, GBP/USD is trying to make headway within a critical hourly range, but the bears are capping the advances at the high of 1.2270. The price recently dropped to a low of 1.2240 as the US dollar jumps back to life.

There has been little in the way of a catalyst in what is otherwise a slow start to the end of the week in Asia. The yen was pushed lower and that is having an effect across the DXY index, pressuring the US dollar's rivals. At the time of writing, DXY is trading at 104.46, near the highs of the day at 104.51 while USD/JPY jumped back above 135 the figure to print 135.22 the high for the day so far. 

In the data, the PMI's preliminary composite index held at 53.1 in June, above the median forecast of 52.6 in a Reuters poll of economists and unchanged from May. But the PMI's measure of new orders effectively stagnated as it fell to 50.8, the lowest in over a year. Factory orders dipped below the 50.0 growth threshold to 49.6.

''The UK is in danger of being the slowest-growing major advanced economy next year, with the highest inflation rate and the biggest current account deficit,'' Kit Juckes at Societe Generale said.

BoE in focus

Meanwhile, with a focus on domestics, the UK's inflation print coupled with that more recent UK PMI outcome has underpinned sentiment that the Bank of England, BoE, is on track to hike by a 50bps rate hike in the next meeting. The UK's central bank is watching for signs that the recent jump in inflation, which hit a 40-year high of 9.1% in May, might turn into a permanent problem for the British economy.

The BoE said last week it was ready to act "forcefully" if it saw signs of persistent inflation pressures, suggesting it might raise interest rates by more than its standard quarter-point increase despite fears of a recession. Overnight index swaps are continuing to price in 50bp moves by the BoE at the next 3 meetings. This lays out a path that would leave Bank Rate above 3% by year-end.