GBP/USD Flat Near 1.3600s as BoE Rate Cut Bets Offset Weak USD

GBP/USD Stagnates Near 1.3600s as BoE Rate Cut Bets and Weak USD Offset

Cable Moves Sideways as Traders Await FOMC Minutes

The GBP/USD pair remains directionless around the mid-1.3600s in early Asian trading on Monday. A lack of high-impact data and mixed macroeconomic signals has left traders hesitant, as BoE rate cut expectations counterbalance the underlying bearish tone surrounding the US Dollar (USD).

The British Pound (GBP) found some temporary relief last week after UK Prime Minister Keir Starmer confirmed that Chancellor Rachel Reeves would stay in office. However, this optimism is tempered by growing bets that the Bank of England (BoE) could cut interest rates as early as August.

BoE Governor Andrew Bailey recently acknowledged that rates are trending lower, while MPC member Alan Taylor advocated for quicker easing to prevent a deeper economic downturn. These dovish tones weigh on the Pound, capping any upside in GBP/USD.

US Dollar Pressured by Fiscal Concerns and Fed Speculation

Despite the weakness in GBP, the US Dollar remains under pressure due to fiscal concerns surrounding President Donald Trump’s proposed tax-cut and spending package, which is feared to inflate the federal deficit and worsen long-term debt.

In parallel, speculation that the Federal Reserve may soon pause or reverse its rate-cutting path is also influencing USD sentiment. Markets are now turning their attention to the FOMC Minutes, set for release on Wednesday, for any clues about the Fed’s near-term direction.

Read our BoE Rate Tracker for updates on UK monetary policy.
Follow the FOMC Minutes coverage to understand how Fed policy may affect USD pairs.

Key Takeaways

• GBP/USD trades flat near 1.3600s amid a lack of clear direction.
• BoE policymakers hint at rate cuts, weighing on the Pound.
• USD struggles due to fiscal risks and Fed rate cut speculation.
• Traders await Wednesday’s FOMC Minutes for next market trigger.