GBP/USD extended recent losses on Wednesday and is likely to remain under pressure from increasingly dovish BoE expectations until Fed policymakers signal that weak U.S. data may lead them to abandon their high-for-longer rates outlook.

Sterling has retreated from last week's 1.2428 high as dovish Fed rate expectations, after a spate of weak U.S. data, have ebbed.

With Fed Chair Jerome Powell steering clear of policy-related comments the pound recovered slightly but remained -0.23% at 1.2267.

Traders will be watching upcoming data, particularly Friday's UK GDP and Nov.
15 UK CPI data.
Weak results could prompt BoE dove Swati Dhingra to vote for a rate cut.

A Dhingra vote to cut rates after BoE chief economist Huw Pill said on Monday that rate futures pricing in a cut for August 2024 "doesn't seem totally unreasonable" would add momentum to dovish expectations and likely send sterling lower still.

Current dovish UK rate momentum will likely build if UK CPI meets lower BoE forecasts, which will likely pull forward rate cut expectations in 2024, putting sterling trend lows by 1.2039 in sharper focus.

For more click on FXBUZ