GBP/USD is facing increased downside risks as market-implied volatility and risk reversals indicate expectations for a weaker Pound Sterling ahead of the forthcoming UK Budget. Commerzbank's FX analyst Michael Pfister highlights that the exchange rate could be adversely impacted unless Chancellor Reeves presents a credible fiscal plan, which is essential for restoring investor confidence in the currency pair.
The potential for a weaker GBP could lead to further fluctuations in the trading dynamics of GBP/USD as traders brace for possible market reactions to the budget announcement. With heightened uncertainty, the outlook remains cautious, and the exchange rate may continue to reflect bearish sentiment unless strong fiscal measures are introduced. As the market digests these developments, the relationship between GBP and USD will be closely monitored for signs of stabilization or further decline.
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Data Source: FX Killer Analysis Team Updated: 2025-11-26 10:22
Disclaimer: This article is for reference only and does not constitute investment advice. Forex trading involves risks; please make decisions carefully.