The British pound moved slightly lower on Tuesday as four members of the Bank of England's rate-setting group prepared to appear before parliament, with market participants focused on whether testimony could alter expectations for a possible March rate reduction.
At 11:36 GMT the pound was quoted at 1.3491 against the U.S. dollar, down 0.0003 points, or 0.02%. Against the euro, sterling changed hands at 0.8732, slipping 0.0006 points, or 0.07%.
Among the rate-setters, Alan Taylor is identified with a dovish position and is already voting in favour of a cut. In contrast, Huw Pill is described as holding a hawkish view and looks likely to continue dissenting against easing this year. Megan Greene is also characterised as hawkish and, based on the information provided, appears unlikely to alter that stance in the near term.
Observers highlighted Governor Andrew Bailey as a pivotal figure for the March decision. If Bailey signals that he has seen sufficient evidence to support a March rate cut, money-market pricing could firm around the current odds. At present, markets are pricing in an 80% probability of a 25 basis point reduction.
ING analysts noted that Bailey's remarks could prompt traders to consider the possibility of more than 50 basis points of Bank of England easing over the course of the year. Separate currency measures remained relatively contained: EUR/GBP traded inside a narrow band between 0.8720 and 0.8745, and ING retains a bias toward 0.8800 for the pair.
In sum, the market reaction on Tuesday was muted but attentive, with FX positioning and money-market probabilities sensitive to any clear directional signals from the bank's leadership during parliamentary testimony.