Pound Sterling Extends Downtrend as Markets Await $2 in Pounds Territory Amid Policy Uncertainty

Cable’s Struggle Intensifies Following Disappointing UK Inflation Report

GBP/USD extended its bearish momentum on Wednesday, declining approximately 0.67% and settling near the 1.3060 level. The disappointing UK Consumer Price Index release failed to provide the catalyst needed to sustain Sterling’s recovery, pushing the pair into its fourth consecutive session of losses and touching multi-week lows.

Federal Reserve Policy Expectations Create Headwinds for Cable

With December interest rate cut odds now priced at roughly 30% via the CME FedWatch Tool, rate markets have shifted toward pricing out near-term easing measures. The Federal Reserve’s policy trajectory remains a critical driver for Cable flows, particularly as investors reassess the likelihood of a December 10 reduction.

Data Void Ahead as Labor Markets Report Takes a Backseat

The US Bureau of Labor Statistics announced the cancellation of October’s Nonfarm Payrolls release due to data collection disruptions stemming from the federal government shutdown. This absence of fresh employment data has left policymakers facing a significant information gap extending into the new year. September’s NFP figures will surface on Thursday, though the report is unlikely to generate substantial market-moving reactions given the October void that follows.

What This Means for Cable Traders

The combination of weak UK inflation dynamics and muted US labor market visibility continues to weigh on the pair as it approaches the $2 in pounds psychological level. With major economic releases delayed and policy uncertainty persisting, GBP/USD may struggle to find meaningful direction until clearer data emerges.