GBP/USD: Off lows, but weak tone persists on talk of BOE considering negative rates

• GBP/USD remains in the red near 1.2950, having hit a low of 1.2921 in early Asia.
• The BOE is reportedly considering pushing rates below zero.
• The central bank is expected to boost the bond-buying program on Thursday.

While the GBP/USD pair has bounced from session lows, it is still trading in the red as the pound is struggling to draw strong bids on reports that the Bank of England (BOE) is considering implementing negative rates. 

At press time, the currency pair is trading near 1.2951, representing a 0.27% loss on the day. 

The currency pair fell to a low of 1.2921 early Thursday after the Telegraph newspaper reported, without citing any sources, that the BOE is investigating the possibility of driving interest rates into negative territory. The European Central Bank (ECB), Bank of Japan, and Swiss National Bank have been running negative interest policies since at least 2016. However, the strategy has failed to boost inflation to the 2% target. 

The GBP will likely take a beating if the BOE drops hints of an imminent move to sub-zero levels on Thursday.  Economists expect a 100-billion-pounds expansion of the BOE's asset purchase program at Thursday's meeting, according to Reuters. 

Apart from the dovish BOE expectations, the US political uncertainty could hurt the pound. That's because the lack of clarity on the election outcome and the possibility that results are contested in court would reduce the probability of the UK and the US agreeing to a trade deal before Dec. 31. 

Technical levels