Short GBP/USD, BoE to cut rates

The Bank of England (BoE) is anticipated to make a 25 basis point rate cut at their upcoming meeting. Key reasons for leaning towards a cut include the BoE’s tendency to look past recent higher-than-expected services inflation, Governor Andrew Bailey’s earlier indication of cutting rates sooner than markets expected, and the likely vote split within the committee. A majority of members who previously viewed the rate decision as balanced might now favor a cut.

Additionally, while the BoE's forward guidance is usually vague, any hints from Governor Bailey during his press conference could signal future rate cuts. Market reactions could see lower yields and a potential decline in the pound. Target: 1.27