Markets continue to price in a double Fed cut in September. Investors shrugged off fears of a US downturn, but bids remain tepid. GBP/USD tested waters on the high side on Wednesday but settled the day where it started just south of the 1.2700 handle. Markets are struggling to shrug off a broad downside shock kicked off late last week after a raft of US data came in below expectations, reigniting fears of a steep US recession looming over the horizon.

Investors have recovered their balance, but recovery remains a limited affair as Cable treads water. Meaningful economic data remains limited heading through the rest of the week, leaving investors to grapple with hopes for a 50 basis point rate cut from the Federal Reserve (Fed) in September. Cable traders will be looking ahead to next week’s UK labor figures and an update to US Producer Price Index (PPI) inflation. UK and US Consumer Price Index (CPI) inflation is also in the barrel for next week, as well as UK Gross Domestic Product (GDP) growth and US Retail Sales