GBP/USD Extends Bearish Reversal as BoE Tightening Bets Fade

Scotiabank strategists Shaun Osborne and Eric Theoret reported that GBP/USD is extending its bearish reversal, retreating toward levels last seen in early July. The decline coincides with a scaling back of Bank of England tightening expectations.

Market pricing for a September rate hike has been cut, and the cumulative increases expected by December have also been reduced. The shift suggests fading conviction in the BoE’s ability to sustain aggressive tightening.

The pound remains under pressure as rate differentials adjust, with the pair vulnerable to further losses if dovish repricing continues.