No significant events are expected today.

The GBP/USD pair is trading softer around 1.2500 during the early Asian session on Wednesday. The U.S. Dollar Index (DXY) is slightly recovering to 105.40, leading to a decrease in the major pair. Later on Wednesday, Federal Reserve members Philip Jefferson, Susan Collins, and Lisa Cook are scheduled to speak. The Bank of England’s (BoE) interest rate decision will take center stage on Thursday.

Expectations of a Fed rate cut have slightly decreased and boosted the U.S. dollar against its competitors. The probability of a June rate cut remains at about 10%, while September chances have fallen to 85%, according to the CME FedWatch tool. On Friday, traders will be watching the preliminary Michigan Consumer Sentiment Index, which is estimated to have dropped from 77.2 in April to 76.0 in May.

On the other hand, the British pound (GBP) is declining as investors focus on the upcoming monetary policy meeting. The central bank of the United Kingdom is expected to keep interest rates at 5.25%. However, there are speculations that the Bank of England will cut interest rates earlier than the Fed, which is impacting the pound sterling. Last month, Bank of England Governor Andrew Bailey said he was comfortable with market expectations of two or three rate cuts this year.

Recommendations: Trade predominantly with Sell orders from the current price level.