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VT 
The British Pound is under pressure against the US Dollar, with GBP/USD reaching its lowest since April. The pair is trading around 1.3047, a decrease of nearly 0.7% due to the strong US Dollar and fiscal concerns in the UK.
The UK faces selling pressure with fears of increased borrowing costs, as Chancellor Rachel Reeves may raise taxes to address a £22bn shortfall. Anticipation remains ahead of the Bank of England’s interest rate decision, as GBP/USD hovers near the 1.3150 level.
Global Market Reactions
Amid foreign exchange shifts, USD/JPY is near 153.50 due to US shutdown worries, and the New Zealand unemployment rate rose to 5.3% in Q3. Meanwhile, EUR/USD fell below 1.1500, driven by the strong US Dollar, with attention on upcoming US economic reports.
Gold has dropped to three-day lows at around $3,930 per troy ounce, pressured by the US Dollar’s performance. Ethereum’s price is below $3,500, reflecting wider negative sentiment in the crypto market. A recent $120 million hack impacted Balancer, a decentralised exchange, highlighting security issues within the sector.
Given the current pressure on the Pound, we see the UK’s fiscal situation as the main driver for the coming weeks. The expectation that the Chancellor will announce tax hikes or spending cuts in the November 20th Autumn Budget to address the deficit is weighing heavily on the currency. We’ve seen from the latest Office for Budget Responsibility update that borrowing for October 2025 was already tracking £5 billion higher than forecast, making some form of fiscal tightening almost inevitable.
This puts the Bank of England in a difficult position ahead of its next meeting. While the latest CPI inflation reading for October 2025 came in at a sticky 3.1%, well above the 2% target, the government’s fiscal tightening will act as a drag on the economy. This conflict makes a rate hike less likely, which removes a key support for Sterling and increases downside risk.
US Dollar Strength and Market Strategies
On the other side of the pair, the US Dollar continues to show broad strength. The US Non-Farm Payrolls report from last Friday, November 1st, 2025, showed a robust addition of 210,000 jobs, reinforcing the Federal Reserve’s “higher for longer” interest rate narrative. Consequently, the CME FedWatch Tool shows market expectations for a rate cut by March 2026 have fallen below 30%, keeping the dollar attractive.
For derivative traders, this points towards strategies that profit from a further decline in GBP/USD. Buying put options with an expiration after the Autumn Budget offers a way to speculate on a fall while defining maximum risk. A strike price below the key 1.3000 psychological level could be considered to capitalize on a potential break of the recent lows.
However, we must also consider that much of this negative news may already be priced into the market. We saw a similar situation in the spring of 2024 when sentiment was extremely bearish before a surprisingly resilient GDP report caused a sharp rally in the pound. Therefore, using options can also protect against a sudden reversal if the fiscal news is less severe than anticipated.
