GBP/USD drifted sideways near 1.3100 on Monday as investors contended with an unusually compressed trading week. US markets will be closed Thursday for the Thanksgiving holiday and will shut early on Friday, effectively limiting Cable traders to just three full sessions of overlapping liquidity between the UK and US.
Market expectations for a third consecutive Federal Reserve (Fed) rate cut in December remain elevated. According to the CME FedWatch Tool, traders are pricing in nearly an 80% probability of a 25-basis-point cut on December 10. Even if policymakers hold steady next month, markets see more than a 98% chance of another cut by January 28.
The longest US government shutdown on record has forced the Bureau of Labor Statistics (BLS) to delay publication of October and November labor-market data until December 16—after the Fed’s rate decision. With limited fresh economic inputs available, the central bank may face added uncertainty as it weighs the case for further easing.
US Producer Price Index (PPI) data due Tuesday could draw increased attention, though its design excludes foreign-made or imported goods. As a result, the report will offer little direct insight into how the Trump administration’s tariff measures are influencing input costs, beyond any indirect price pressures already feeding through the economy.
