Cable is trading down to session lows now, dropping by 0.4% to 1.3316 on the day. That's a fall to one-week lows as sterling is paying the price for a softer set of UK inflation numbers in September here. This comes as traders are stepping up bets for a BOE rate cut after the data.
A move in November is still ruled out but December has gotten a whole lot interesting. Before this, traders were pricing in roughly 11 bps of rate cuts by year-end but that has now climbed to about 18 bps. A full 25 bps rate cut is now priced in for February next year, brought up from March next year instead.
Softer UK data in the weeks ahead will definitely see traders heavily consider a move in December and that will be something to be wary about.
As for the pound, GBP/USD has now dropped under its 200-hour moving average (blue line) this week. And that sees sellers now establish a more bearish near-term bias in the pair. The recent lows around 1.3250-60 is the next key region to watch before 200-day moving average comes in at around 1.3212 currently.
