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RBC Capital Markets are targeting a lower Pound in their regular "trade of the week" in anticipation of Bank of England disappointment.

This week's trade sees RBC Capital's strategists selling the Pound against the Swiss franc, anticipating the risk of disappointment at the Bank of England's policy update on Thursday.

"Heading into this week’s MPC decision, markets are skewed toward a 50bp hike (47bp priced) and although this is the most likely outcome, risk-reward favours positioning for a majority vote for 25bp," says Adam Cole, Chief Currency Strategist at RBC Capital Markets.

The Pound rose 2.5% against the Euro in July but fell by a third of a percent against the Swiss franc, highlighting the Swiss currency's relative strength when juxtaposed with the Eurozone's single currency.

Franc outperformance is a theme RBC Capital Markets have been following, last week betting on gains against the Swedish Krona.

"This week we stick with the theme of CHF outperformance, but roll last week’s CHF/SEK long into a short GBP/CHF position," says Cole.

Regarding the Bank of England, RBC Capital believes even if the MPC delivers the 50bp hike that is widely expected, the danger is that the minutes are not sufficiently hawkish.

They note markets are looking for a further 100bp of further hikes to be delivered by early 2023.

But with inflation only set to peak in October RBC Capital is concerned the UK's real income squeeze has further to run.

RBC Capital are targeting a decline in GBP/CHF to 1.1350.

Last week’s long CHF/SEK trade was meanwhile closed for a 1.1% gain.