GBP/USD: Pound Sterling Seeks Direction as Conflicting Views Clash at $1.2550 Mark

• The GBP/USD pair is caught between a rock and a hard place. In the green corner is the bulls’ camp with long bets on the sterling, fueled by speculation that UK inflation will stay elevated in 2024. In the red corner are the bears who think that’s not exactly true. In fact, they foresee three to four interest rate cuts for the Bank of England next year.
  
• Against this backdrop, the sterling whipsawed early on Wednesday, extending the zig-zagging motion from earlier in the week. The pair peaked at $1.2610 and then reversed course to slip under $1.2500. In the early deals today, the rate goes for $1.2530 to $1.2550.
  
• Inflation in the UK has been slowing to a 4.2% annual rate for October, down from 6.7% in September. Fresh data released today showed that the UK economy contracted in October. Gross domestic product fell 0.3% for September through October, missing the consensus view for a flat rate of growth.