Ella 
GBP/USD strengthened modestly to around 1.3075 during the Asian session on Thursday, but lacked bullish momentum and remained near the nearly one-month low hit the previous day.
The U.S. dollar (USD) consolidated recent strong gains to reach its highest level since August 16 and continues to draw support from rising bets on the Federal Reserve’s (Fed) scheduled 25 basis points (bps) interest rate cut in November. The Federal Reserve meeting minutes released on Wednesday reconfirmed this expectation. The minutes showed that the outside world unanimously believed that this unexpected rate cut would not lock in the specific pace of future interest rate cuts by the central bank. This has kept the 10-year U.S. Treasury yield above the 4% mark, its highest level since July 31, continuing to support the U.S. dollar and weighing on GBP/USD.
Meanwhile, dovish comments from Bank of England (BOE) Governor Andrew Bailey last week suggested the Bank of England may accelerate its rate-cutting cycle. This in turn could therefore contribute to the relative underperformance of Sterling (GBP) and prevent significant upside for GBP/USD. Traders may also be more inclined to wait and see U.S. consumer inflation data, which, along with Friday’s U.S. producer price index (PPI), may influence expectations for the path of the Fed’s interest rate cuts. This in turn will therefore drive dollar demand in the short term, providing a clear boost to GBP/USD.
You Might Be Interested In:
- EUR/USD Rises Above 1.0950
- JPY/USD Still On The Leading Edge
- USD/CHF Weakens Amid Geopolitical Risks
