British Pound consolidates above 1.3200, its lowest since late June against a bullish USD

The British Pound (GBP) has remained relatively stable above 1.3200, its lowest level since late June against the US Dollar (USD). During the Asian session on Friday, the GBP/USD pair edged higher, suggesting some support from the US Dollar's temporary pause following a strong rally. However, bearish fundamental factors, such as hawkish Federal Reserve (Fed) outlook, elevated US bond yields, and geopolitical uncertainties, continue to favor the USD.

The Bank of England (BoE) has also taken a more cautious stance or gradual easing approach, which further supports the downside for the GBP/USD pair. The CME Group's FedWatch Tool indicates a 65% chance that the Fed will raise interest rates again in October, following a recent 25 basis point (bps) increase. Meanwhile, oil-driven inflation fears and geopolitical risks are pushing the USD to multi-year highs, providing further support to the USD and maintaining the bearish sentiment for the GBP/USD pair.

Traders now await BoE Governor Andrew Bailey's speech for more insights into the future policy path. The GBP/USD pair is currently trading below the longer-term 200-day Simple Moving Average (SMA) of 1.3452, acting as a key overhead barrier for bulls. A break below 1.3300 would expose the year-to-date low of 1.3265 and potentially trigger further selling.