The Pound Sterling (GBP) is up a marginal 0.1% against the US Dollar (USD) as it underperforms on the crosses heading into Friday’s NA open, Scotiabank's Chief FX Strategists Shaun Osborne and Eric Theoret report.

GBP is soft on crosses following tepid final services PMI

"The UK’s final PMI was revised down, to 50.8 from 51.9, implying tepid growth. As with EUR, the GBP has failed to capture much of this week’s rise in UK-US spreads, suggesting a slight disconnection from its fundamentals."

"For the UK, sentiment remains critical as markets eye the government’s fiscal plans ahead of the November 26 budget. The options market is still pricing a relatively high premium for protection against GBP weakness, offering some scope for sentiment driven gains if Chancellor Reeves can maintain support."

"The RSI is neutral as it continues to hover around the dividing threshold at 50. Congestion is also centered around the 50 day MA (1.3463), with a broader two month range bound between support in the low 1.33s and resistance in the upper 1.36s. We look to a near-term range bound between 1.34 and 1.35."