The GBP/USD pair is edging higher toward 1.3000 during Asian trading on Wednesday, although the Pound Sterling (GBP) faces challenges from declining consumer and producer inflation figures and weak labor market data in the United Kingdom. These factors have fueled expectations that the Bank of England (BoE) may implement a 25 basis point rate cut in November, followed by another reduction in December.
On Tuesday, BoE Governor Andrew Bailey emphasized the need for improved oversight of the non-banking sector, stating, “We are approaching a point where we need to pivot from rule-making to surveillance” to effectively monitor financial activities outside traditional banking.
BoE Deputy Governor Sarah Breeden is set to participate in a panel on financial regulation organized by the Institute of International Finance in Washington on Wednesday.
Meanwhile, the US Dollar (USD) is gaining strength as Treasury yields rise in response to increasing expectations of rate cuts by the Federal Reserve. The US Dollar Index (DXY) is trading near a two-month high at 104.20, with 2-year and 10-year Treasury yields at 4.05% and 4.23%, respectively. Federal Reserve Bank of San Francisco President Mary Daly noted on social media that the economy shows signs of improvement, with inflation falling significantly and the labor market stabilizing.
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