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• GBP/USD shed another 0.25% on Monday as markets tilt risk-off.
• Rate cut hopes continue to evaporate, and a lack of UK data keeps Cable pinned.
• FOMC meeting minutes, US CPI inflation, and UK GDP dot the economic landscape this week.

GBP/USD sunk another one-quarter of one percent on Monday, easing into a fresh four-week low and closing below the 1.3100 handle for the first time since mid-September. Investors rate cut hopes are buckling under the weight of a firmer-than-expected US labor market, and geopolitical tensions have kept trader risk appetite pinned.

Investor appetite took a leg down to kick off the fresh trading week as market hopes for further outsized rate cuts continue to dwindle. Rate markets now overwhelmingly expect the Fed’s next rate move on November 7 will be a demure quarter-point cut, down from the heady 50 bps that rate markets expected just after the Fed’s opening volley of a 50 bps double cut in September. Fedspeak has steadily telegraphed to markets that a further deterioration in the US economy, and specifically the US labor market, will be the thing that opens the door to further extreme moves on rates.

Last week’s bumper Nonfarm Payrolls (NFP) eviscerated nearly all hopes for a double-wide rate cut in November, to the point rate traders are seeing a one-in-five chance of no rate cut at all on November 7, according to the CME’s FedWatch Tool.

Data remains limited on the UK side, with GBP traders forced to wait until Friday’s UK Gross Domestic Product (GDP) print. Meanwhile, Greenback speculators will be keeping a close eye on US Consumer Price Index (CPI) inflation figures due on Thursday.

GBP/USD price forecast
 

Cable has closed in the red for a fifth straight day as fear-fueled Greenback bids continue to rise. The pair has dipped back below the 50-day Exponential Moving Average (EMA), and GBP/USD daily candlesticks have closed below 1.3100 for the first time since mid-September. Despite setting multi-year highs last month, Cable is still down 2.8% peak-to-trough.

GBP/USD daily chart
 

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