GBP Retreats from One-Week High as USD Buying Interest Persists

The British Pound (GBP) has retreated from its one-week high as US dollar buying interest remains strong.

Although the UK's upward revision of Q2 GDP growth to 0.4% and a possible 25-basis-point rate hike by the Bank of England on November 5 may support the GBP, prevailing US Dollar buying has capped the pair's upside.

The CME Group's FedWatch Tool indicates that traders are still pricing in an 87% chance of a rate hike by the end of this year, which maintains oil-driven inflation fears and keeps US bond yields elevated near multi-year highs. This supports the safe-haven Greenback, preserving its recent gains to a two-month high.

The focus will remain on the US Nonfarm Payrolls report due on Friday, which will determine the USD trajectory and provide meaningful impetus to the GBP/USD pair.