The British pound faces data out of the Bank of England this morning. However, currency ranges remain tight and we would expect technical considerations to dominate the outlook until we get into the big data events of next week.

16:30: Scotiabank see a poor second half to 2013 for sterling

A quick view from Camilla Sutton at Scotiabank:

"We see GBP weakening into yearend as the market refocuses on relative growth (UK underperformance), diverging monetary policy paths and building GBP bearish sentiment. We hold a yearend target of 1.45."

15:35: BoE to limit any potential sterling upside this week

Commonwealth Foreign Exchange:

"Sterling held near recent highs ahead of this week’s Bank of England monetary policy meeting, which concludes on Thursday. Last month, the BOE surprisingly provided forward guidance on policy, signalling that conditions will remain very accommodative for the foreseeable future. Similar guidance this week from the BOE would limit the pound’s upside."

14:55: US dollar strength called into question

David Simmonds, Head of Currency Strategy at RBS, has questioned the assumption widely held of a steady rally in the US dollar through the remainder of 2013. See the latest rate forecasts here.

11:30: CBI Industrial Trends in strong beat

Good news on the data front.

The UK CBI Distributive Trades Survey – Realised rose to 17 in July from 1 in June, according to the report released by the Confederation of British Industry. Analysts expected less increase to 11.

However, no impact on sterling once more. All eyes fixated on Thursday it seems.

9:40: Volatility ahead thanks to central banks

The outlook for currencies this week rests largely with the world's largest central banks.

Jonathan Sudaria at Capital Spreads says:

"With Bernanke still stating that tapering in September in ‘not a sure thing’, this week’s raft of heavy hitting US economic data, including the payrolls, unemployment, advance GDP and an FOMC statement could be triggers for volatility.

"Not to be outdone, in Europe we have the ECB and BoE meetings where the trend of dovish forward guidance will be expected to continue."