No significant events are expected today.

The GBP/USD pair continued its sterling rally for the second consecutive day, breaking through the 1.3400 level and reaching new 30-month highs after the US dollar weakened significantly on Tuesday.

Wednesday will be quiet for the pound in terms of data, although traders will be watching the statements of Bank of England’s Monetary Policy Committee (MPC) member Megan Greene. MPC member Greene will speak at the North East England Chamber of Commerce.

The US economic data list for Wednesday also lacks the weight to impact the midweek market session. The August new home sales figure is unlikely to provide much momentum in either direction, followed by a speech from Federal Reserve Board member Adriana Kugler, who will speak at the Harvard Kennedy School in Cambridge.

On Tuesday, consumer confidence worsened across the board, and consumer inflation expectations for the next 12 months accelerated to 5.2%. Consumers also reported a general weakening of their six-month family financial outlook, and their assessment of overall business conditions turned negative.

The decline in consumer confidence triggered renewed rate trading on the markets, favoring a sharp rate cut in November. According to CME’s FedWatch tool, rate markets are pricing in nearly a 60% chance of a second 50 bps rate cut on November 7, and only a 40% chance of a more moderate 25 bps cut. Earlier in the week, traders had priced in roughly equal chances of a 50 bps or 25 bps rate cut.

Recommendations: Trading is predominantly Buy orders from the current price levels.