GBP/USD remains close to one-month low, seems vulnerable near mid-1.3000s

• GBP/USD kicks off the new week on a weaker note amid sustained USD buying.
• Expectations for more aggressive BoE policy easing further undermine the GBP.
• The fundamental backdrop supports prospects for an extension of the downfall.

The GBP/USD pair struggles to capitalize on Friday's modest gains and attracts fresh sellers at the start of a new week. Spot prices currently trade around mid-1.3000s and remain close to a one-month low touched last Thursday amid a bullish US Dollar (USD). 

The USD Index (DXY), which tracks the Greenback against a basket of currencies, stands tall near its highest level since mid-August as traders have priced out the possibility of further jumbo interest-rate cuts by the Federal Reserve (Fed) in November. This, along with persistent geopolitical risks stemming from the ongoing conflicts in the Middle East, turns out to be another factor benefiting the safe-haven buck and exerting some downward pressure on the GBP/USD pair. 

The British Pound (GBP), on the other hand, is undermined by expectations that the Bank of England (BoE) might be heading towards speeding up its rate-cutting cycle. In fact, markets are pricing in a 90% chance that the BoE will cut rates in November. The bets were lifted by the recent comments from the BoE Governor Andrew Bailey, saying that there was a chance that the central bank could become a bit more aggressive in cutting rates if there's further good news on inflation. 

Meanwhile, the initial market reaction to Friday's economic releases from the UK and the US fades rather quickly, suggesting that the path of least resistance for the GBP/USD pair is to the downside. The UK Office for National Statistics (ONS) reported that the economy grew by 0.2% in August, marking a modest recovery after two months of stagnation in June and July. This was accompanied by better-than-expected UK Manufacturing and Industrial Production figures for August.

From the US, the Producer Price Index for final demand was unchanged in September and rose 1.8% from a year ago. The core gauge that excludes volatile food and energy categories climbed 0.2% from the prior month and 2.8% from a year ago. The data pointed to a favourable inflation outlook and supported expectations for additional interest rate cuts by the Fed in November. This might hold back the USD bulls from placing aggressive bets and offer some support to the GBP/USD pair.