GBP/USD Remains On The Defensive Below 1.2600

GBP/USD is trading around 1.2575, maintaining a mild bearish bias, despite the greenback’s losses on Wednesday. GBP/USD remains weak amid slowing UK inflation and subdued market sentiment. Traders will be closely watching Wednesday’s speech by Federal Reserve officials as it could provide some hints on the path of interest rates and the outlook for policy.

Many Fed officials spoke on Tuesday about the outlook for monetary policy. Cleveland Fed President Loretta Mester said she still expects a rate cut this year but ruled out holding the next policy meeting in May. San Francisco Fed President Mary Daly also expects to cut interest rates this year, but not until there is more evidence that inflation has cooled. San Francisco Fed President Daly said three interest rate cuts this year is a “very reasonable baseline expectation” but there are no guarantees. Investors are now pricing in a roughly 65% chance of a rate cut by June, the CME FedWatch tool shows, down from about 70% after the Fed’s March meeting.

U.S. JOLTs job openings climbed to 8.756 million on Tuesday from a downwardly revised 8.748 million in January, better than market expectations. At the same time, the monthly rate of factory orders improved to 1.4% in February from a decrease of 3.8% in the previous month.

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