Sterling has traded in a choppy 1.2860-1.3175 range since early October, surviving Wednesday's turbulent FX moves around U.S. election results, as well as ongoing Brexit talks.
The Bank of England is not expected to surprise in Thursday's policy decision despite speculative reports to the contrary, so a strategy of trading the range, rather than looking for breaks, appears appropriate.
Cable closed 0.6% lower on Wednesday with EUR/GBP up 0.65%, as Brexit negotiations failed to make significant progress on the key issues of fishing rights, the EU's level playing field and UK sovereignty nL8N2HQ6AX.
Markets remain optimistic that a compromise will be reached, but time is running out.
GBP/USD lost another 0.43% early in Asia Thursday after the Telegraph newspaper reported, without citing any sources, that the BOE is said to be considering a move into negative rates nL1N2HQ3VL.
It is well known that the BOE has been evaluating the potential of negative rates as a tool in their arsenal, but there have been no signals to the market that such a historic move is imminent.
Economists expect a 100-billion-pounds expansion of the BOE's asset purchase programme at Thursday's meeting nL8N2HQ3NVnL8N2HQ52A.
Cable has recovered from the knee-jerk fall and is off just 0.2%.
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