GBP/USD weakens to 1.2520 as UK rate cut expectations resurface

GBP/USD has declined 0.5% to 1.2520 as market participants price in higher probability of Bank of England rate cuts in early 2025. Sterling weakness accelerated after softer UK economic indicators and dovish comments from BoE officials reignited easing expectations. The pound's retreat comes despite recent USD weakness, highlighting GBP-specific concerns about growth momentum and persistent inflation challenges. Technical analysis shows GBP/USD breaking below the key 1.2550 support level, with next support at 1.2500 psychological level. The 50-day moving average at 1.2580 now acts as resistance. Market positioning data reveals increasing short positions on sterling as traders anticipate the BoE may need to prioritize growth support over inflation fighting. Near-term direction depends heavily on upcoming UK GDP and inflation data, with further disappointments likely to accelerate pound selling pressure toward 1.2450.