GBP/USD Faces Downside Pressure as US Inflation Reprices Fed Rate Path

GBP/USD is facing increased downside pressure as hotter-than-expected US inflation data forces markets to reprice Federal Reserve rate cut expectations. The shift in monetary policy outlook has strengthened the US dollar broadly, weighing on cable alongside other major pairs including EUR/USD, USD/JPY, and AUD/USD. Persistent inflationary pressures in the US economy have reduced the probability of near-term Fed easing, with traders now pushing back anticipated rate cuts further into the year. The repricing has widened the perceived policy divergence between the Fed and the Bank of England, which faces its own balancing act between stubborn UK inflation and slowing economic growth. From a technical perspective, the heavier rate path narrative suggests GBP/USD may test lower support levels in the near term, with sellers likely to target key technical zones below current price action. Traders should monitor upcoming US economic releases and Fed commentary for further clarity on the rate trajectory, as any additional hawkish signals could accelerate dollar strength and deepen losses for the pound.