Cable is back to range bounded trend amid speculation over rate hikes from Federal reserve and BoE

GBP/USD has regained to catch the range bounded trend; we had advocated currency option strategy on 06^th August as it had to suit such circumstances where in the recommendation was that the cable would remain in the range bound trend and speculating opportunities with strangle shorting on low IV projections.

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Sterling edging up against dollar on Monday but was still trading near a three-week low, as investors gamble the U.S. Federal Reserve was almost certain to precede the Bank of England in raising interest rates.

But there had been chatters in recent past that the BoE could lift rates as soon as November - potentially sooner than the Fed - after Governor Carney said the time for a hike was getting closer. As a result effects priced in the currency markets last week, Again speculation from Miles, the normally dovish David Miles said that the idea that the BoE had to wait for the Fed to raise rates was daft.

But minutes from the BoE's latest monetary policy committee meeting published last week showed just one policymaker voted for an immediate increase in interest rates, defying speculation that at least two MPC members would vote for a hike.

While expectations for BoE interest rate increases were consequently pushed back, U.S. jobs data released on Friday firmed up bets on a Fed rate hike by the end of the year, perhaps as soon as September or, if not, December. We project GBPUSD is likely to trade in sideways on the back of speculating statements by central banks.