• GBP/USD rises ahead of the UK Autumn Budget due later on Wednesday.
• The US Dollar struggles as softer data reinforce the likelihood of a Fed rate cut in December.
• CME FedWatch Tool indicates pricing in more than 84% odds of a 25-basis-point Fed rate cut in December.

GBP/USD continues its winning streak for the fifth consecutive day, trading around 1.3190 during the Asian hours on Wednesday. Traders await the UK Chancellor of the Exchequer, Rachel Reeves, to deliver the Autumn Budget later in the day.

The British Finance Minister Rachel Reeves is expected to unveil tens of billions of pounds in new tax hikes, a budget that will test her credibility with both bond investors and lawmakers pushing for increased welfare spending. A more responsible fiscal stance can strengthen long-term confidence in UK assets, offering mild support to the Pound Sterling (GBP).

Just over a year after implementing £40 billion ($52.7 billion) in tax increases, the largest since the 1990s, and billed as a one-off. Reeves is now compelled to pursue additional revenue-raising measures amid a likely downgrade to Britain’s economic outlook and rising debt-servicing costs.

UK softer inflation eased to 3.6% in October and strengthened expectations of a Bank of England (BoE) rate cut. Markets now assign an 80% probability of a 25-bp cut in December, pushing gilt yields lower ahead of the budget.

The GBP/USD pair also gains as the US Dollar (USD) struggles, with softer United States (US) economic data boosting expectations of a Federal Reserve (Fed) rate cut in December. The CME FedWatch Tool suggests that markets are now pricing in more than 84% odds that the Fed will cut its benchmark overnight borrowing rate by 25 basis points (bps) at its December meeting, up from 50% probability that markets priced a week ago.