- GBP/USD on Wednesday is attracting new sellers and is under pressure due to various factors.
- Sterling continues to be weighed down by dovish comments from Bank of England Governor Bailey last week.
- The reduction in bets on a big Fed rate cut is supporting the dollar and contributing to its decline.
The GBP/USD pair is struggling to take advantage of the previous day's modest recovery rally, but will encounter fresh supply during Wednesday's Asian session. Spot prices are currently trading around the 1.3085-1.3080 area, staying within range of Monday's nearly four-week low.
British pound sterling (GBP) continues to underperform relative to the market, with market confidence that the Bank of England (BoE) is set to accelerate its rate cutting cycle. The bet was boosted by dovish comments from BoE Governor Andrew Bailey last week that further good news on inflation could lead the central bank to cut rates more aggressively. This is considered an important factor exerting downward pressure on the GBP/USD pair.
Meanwhile, the U.S. dollar (USD) remains high near last week's seven-week high as the likelihood of more aggressive policy easing by the Federal Reserve diminishes. In fact, the market is currently pricing in a more than 85% chance that the Fed will cut borrowing costs by 25 basis points (bps) in November. Furthermore, rising geopolitical tensions in the Middle East and disappointment over China's stimulus renewal are supporting the market and contributing to the mood surrounding the GBP/USD pair.
The basic background outlined above suggests that the path of least resistance for spot prices is downside. However, bearish traders may refrain from betting aggressively and prefer to wait for the release of the FOMC minutes later in the US session. Separately, the US Consumer Price Index (CPI) and Producer Price Index (PPI) on Thursday and Friday respectively will influence the development of the USD price and determine the next move in the direction of the GBP/USD pair. will help you. .
