Sterling fell to a 10-month low against the US dollar this week, breaking through 1.30 on the back of weaker data. Earnings, inflation and retail sales slowed from the previous month, casting doubt on the marketís expectations for a rate hike next month. The BoE is widely expected to be the next major central bank to tighten monetary policy with investors currently pricing in 84% chance of a hike on August 2. Despite these softer economic reports, CPI is well above the central bankís 2% target and average weekly earnings is hovering between 2.5% and 2.6%. The BoE needs to get inflation back to target and with commodity prices on the rise, the pressure is only growing. Bank of England Governor Carney also believes that the trade war will have only a modest impact on the UK but the real trouble is still Brexit. Despite the prospect of a hike, investors are selling sterling and they may not be convinced to buy until data turns positive or UK policymakers talk up the currency. With no major UK economic reports scheduled for release this week, the only hope is BoE Deputy Governor Broadbentís speech on Monday. Taking a look at the charts, 1.30 is the key level of support for GBP/USD. If this level breaks again, we could see the sell-off extend to 1.28. If 1.30 holds, GBP/USD could rally back to 1.32. In lira exchange rate at 5.54516. Unless policymakers question the marketís expectations for future rates, we still think GBP is a buy on dips leading up to the policy announcement Ė but as usual, it's best to wait for some sign of stabilization before jumping in.