The GBP gains for the second day in a row amid USD weakness. Despite GBP’s rally, the outlook remains bearish. U.S. CPI data will be the main catalyst for the FX market this week and could set the near-term trading tone for GBP/USD.
in the last two sessions, its outlook remains relatively bleak. First, the likelihood that the UK economy will contract for eight consecutive quarters, as the Bank of England has warned, falling into the longest recession in at least a century, is certainly a headwind that should limit the pound's upside.
The British pound also lacks monetary policy support. Although the BoE has been steadily raising borrowing costs, it has not been as aggressive as the Federal Reserve. In fact, at its last meeting, the institution led by Andrew Bailey came out strongly against extreme market pricing, noting that theLooking ahead, there are several high-impact events to follow in the coming days, but the most important for GBP/USD will likely be Thursday's U.S. consumer price index report.
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