GBP/USD drifted lower, away from its NorAm open of 1.2590 and was eying lower 30-day Bolli support at 1.2562 and the Aug.
25 trend low at 1.2548, as U.S. Treasury yields drifted slightly higher ahead of a slew of key U.S. data culminating in non-farm payrolls on Friday.

Despite a lofty UK rate advantage of 100bp by December 2024 03SRA:0#SON3:, GBP/USD remains on the backfoot as Fed rate expectations remain buoyant after Friday's Jackson Hole speech by Fed Chair Jerome Powell and front-end U.S.-UK rate expectations converge.

Though diminished summer liquidity issues tend to exacerbate FX moves, there has been a marked move higher in Fed rate expectations as IRPR on Eikon now indicates the U.S. rate peak at +18bp in November where earlier in August it was seen at +5bp.

Further out the SOFR strip, expectations for a first Fed rate cut have migrated to July 2024 since Jackson Hole versus March in early August, eating into sterling's yield advantage.

Traders will lean on upcoming PCE and employment data to discern GBP/USD direction.

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