opean session. The pair is currently trading around the 1.1900 mark and remains well below a nearly three-month high touched the previous day.selling, prompted by a slight improvement in the risk sentiment. According to the initial findings, the missile that hit Poland on Tuesday may have been fired by Ukraine at an incoming Russian missile. The headlines infuse some stability in the financial markets, which, in turn, undermines the safe-haven buck.
Apart from this, firming expectations for a less aggressive policy tightening by the Federal Reserve is seen as another factor weighing on the greenback. In fact, the markets are now pricing in over a 90% chance of a 50 bps rate hike at the December FOMC policy meeting. The bets were reaffirmed by Tuesday's release of the softer US Producer Price Index, which pointed to easing inflationary pressures.
The Sterling, on the other hand, draws support from hotter-than-expected UK consumer inflation figures. In fact, the headline UK CPI accelerated to the highest level since 1981 and came in at an 11.1% YoY rate in October, up from 10.1% recorded in the previous month. Adding to this, the core inflation rose 6.5% YoY during the reported month.to continue raising borrowing costs.
The lack of strong follow-through buying, meanwhile, warrants some caution before positioning for any further appreciating move. Market participants now look to the US monthly data, due for release during the early North American session. Apart from this, fresh geopolitical developments will influence the USD price dynamics and provide some impetus to the GBPUSD pair.