Ella 
On Thursday, GBP/USD extended this week’s pullback decline from around the 1.2300 mark, facing some selling pressure for three days in a row. In Asia, GBP/USD fell further below the 1.2100 integer mark, hitting a more than three-week low and being suppressed by continued buying of the US dollar.
The growing belief that the Federal Reserve (FED) will stick to its hawkish stance remains a support factor for rising U.S. Treasury yields and continues to support the dollar. In fact, the market still believes that the Fed is likely to raise interest rates again before the end of this year. That has kept the 10-year U.S. Treasury yield steady near a 16-year peak, around the psychological 5% mark it hit earlier this week. In addition to this, generally weak market risk sentiment is another factor favoring safe-haven currencies, which in turn has put some pressure on GBP/USD.
On the other hand, the prospect that the Bank of England will keep interest rates at a 15-year high of 5.25% on November 2 due to the risk of recession also weighed on Sterling (GBP). Weak UK labor market data and PMIs have added to the market’s bets, which should keep the Bank of England on hold. This has put selling sentiment in GBP/USD and supports the prospect of further losses in the near term. With no relevant economic data released from the UK to move the market, traders are focusing on US macro data for some meaningful impetus.
Thursday’s U.S. economic schedule will focus on the release of preliminary U.S. third-quarter gross domestic product and durable goods orders (Durable Goods Orders). This will be coupled with a scheduled speech by Federal Reserve Governor Christopher Waller and U.S. bond yields to influence the dollar. In addition, market volatility after the European Central Bank meeting will also bring short-term trading opportunities for the GBP/USD currency pair. That said, the above fundamental backdrop favors bearish traders and suggests that downside resistance for GBP/USD remains minimal.
