The GBP/USD pair continues to decline, falling below the key 1.3200 level amid a strengthening U.S. dollar. The U.S. Dollar Index, which measures the dollar's value against a basket of major currencies, is rising in response to the relatively hawkish outlook delivered by the Federal Reserve on Wednesday.

At the same time, there are ongoing concerns that the continuing U.S. government shutdown could negatively impact macroeconomic data, which limits the dollar's upward potential — thereby creating somewhat more favorable conditions for the pound in the GBP/USD pair. Fed Chair Jerome Powell dismissed market expectations for a rate cut in December, and heightened demand for safe-haven assets ahead of the upcoming U.S.–China leaders' meeting — between Donald Trump and Xi Jinping — also prevented the dollar from declining further.

Meanwhile, the British pound is under additional pressure due to budget-related concerns. The UK Office for Budget Responsibility (OBR) is reportedly preparing to downgrade its productivity growth forecasts by about 0.3%, which could push the fiscal deficit above £20 billion. All this comes ahead of the Autumn Budget, to be presented by Chancellor Rachel Reeves on November 26.

This situation is weighing on the pound, given the growing expectations of a Bank of England rate cut at the upcoming meeting. The probability of a 25-basis-point rate reduction is currently estimated at around 68%, supported by declining inflation and budgetary factors, both of which pave the way for a more dovish monetary policy.

From a technical perspective, oscillators on the daily chart remain negative; however, the Relative Strength Index (RSI) is approaching the oversold zone, which suggests the possibility of a minor corrective rebound. Therefore, traders aiming to sell the British pound should proceed with caution.