GBP/USD Declines to Near 1.3250 Amid Bearish Momentum and Widening Policy Divergence

The GBP/USD pair softened to near 1.3250 in Thursday's early European session, as the negative outlook for the pair persisted below the 100-day Simple Moving Average (SMA). The bearish Relative Strength Index (RSI) momentum contributed to the decline.

Analysts pointed out that the British Pound was edging lower against the US Dollar amid widening monetary policy divergence between the Bank of England and the US Federal Reserve. The BoE policymaker Alan Taylor noted that it was unclear whether a single rate hike would be practical to tame inflation without fueling unwarranted market speculation of further increases.

Financial markets now see an about 38.2% probability of a rate hike in October, down from about 45% before the US Personal Consumption Expenditures (PCE) data.