GBP/USD slumped on Thursday, hitting a session low of 1.2210 in New York morning trade after U.S.
CPI added to bearish sentiment on sterling, which had already been hitby downward revisions to UK GDP that stoked early BoE cut expectations, leaving the pound potentially vulnerable to visiting its trend lows.

With most major central banks nearing the end of rate hike cycles, traders' focus is moving away from inflation to assess the impact of cumulative tightening on economic growth and the potential for a shift toward monetary easing.

In addition to the weaker UK GDP data, BoE member Swati Dhingra noted prior hikes have had only a slight effect on the economy, and also said if growth falls much from here a cut may be in order, which weighed on recent sterling gains.

Sterling traders now focus on UK CPI on Oct. 18 to see how the recent tug-of-war between hawks and doves evolves.
Should the recent 5-4 vote to keep rates steady transition to an even more dovish tack, GBP/USD should take out its recent trend low by 1.2039 and March lows by 1.18.

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