GBP/USD Weakens to 1.2980 Ahead of Crucial BoE Rate Decision

GBP/USD has declined 0.5% to 1.2980, approaching key psychological support at 1.3000 as markets brace for the Bank of England's interest rate decision. The pound faces headwinds from expectations that the BoE may signal a pause in its hiking cycle amid slowing UK economic growth and easing inflation pressures. Recent UK data showed CPI falling to 4.2% year-over-year, still above target but trending lower. The Dollar Index maintains strength at 104.70, supported by robust US economic fundamentals and hawkish Fed rhetoric. Technical analysis reveals GBP/USD sitting just above crucial support at 1.2950, which if broken could accelerate losses toward 1.2900. Resistance is seen at 1.3050 and 1.3100. EUR/USD trades sideways near 1.0880, reflecting broader dollar strength. Traders should prepare for increased volatility around the BoE announcement, with any dovish surprise likely to push cable below the 1.3000 handle.