The Pound Sterling (GBP) is up a modest 0.2% vs. the US Dollar (USD) and a relative performer among the G10 currencies in an environment of broad – albeit mild – USD weakness, Scotiabank's Chief FX Strategists Shaun Osborne and Eric Theoret report.

GBP/USD consolidates near 200-DMA

"The GBP’s gains are welcome following the pullback from its recent early January high above 1.35, with support offered by this week’s stronger than expected industrial production figures that appear to have lifted short-term rate expectations for the BoE."

"While the short-term rates market continues to lean toward further easing, the extent of cuts has been pared back with markets now pricing about 42bpts by the end of this year (vs. 47bpts last Friday)."

"The overall technical picture is neutral with an RSI that continues to hover around the 50 threshold. Recent congestion has centered around the 200 day MA (1.3406) and the near-term balance of risk appears to favor consolidation within a tight range bound between 1.3350 support and 1.3450 resistance."