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    Pound Sterling struggles again against the US Dollar, falling to 1.3300 level

    by VT Markets
    /
    Oct 27, 2025

    Expectations for More BoE Easing

    The GBP is struggling because people expect more easing from the Bank of England (BoE). This impacts the GBP/USD pair negatively. Currently, the market sees a 40% chance of a 25-basis-point rate cut by the BoE in November. They also expect a total reduction of 65 basis points by the end of the year. This view is backed by steady inflation data and a cooling jobs market in the UK. The pound has consistently failed to break past the 1.3500 resistance level, making this a key barrier in the near term. Traders might consider selling call options with strike prices at or above 1.3500. This approach allows them to earn premiums based on the expectation that the pair won’t surpass that level in the coming weeks. The case for a weaker Sterling is getting stronger due to the expected rate cut from the Bank of England. Recent data from the Office for National Statistics shows that UK wage growth hit its lowest in a year, suggesting a slowing jobs market. This situation makes buying put options with strike prices below 1.3300 an appealing strategy to either protect against or profit from a further decline.

    US Dollar as a Safe Haven

    On the other side, the US dollar is benefiting from its status as a safe haven due to increasing trade tensions between the US and major Asian economies. We saw a similar trend earlier in 2023 when global uncertainty pushed the US Dollar Index up significantly. This situation makes it risky to go against the dollar, supporting a bearish or neutral outlook on GBP/USD. With the Bank of England’s policy meeting coming up in November, we can expect increased volatility in the options market. Currently, there’s a 40% chance of a rate cut, creating uncertainty and driving up options prices. Therefore, using debit or credit spreads could be a smarter way to express a view on the pound without paying high premiums. Create your live VT Markets account and start trading now.

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