GBP/USD falls to near 1.3450, upside appears on fading BoE rate cut bets

• GBP/USD may regain its ground amid the easing likelihood of further rate cuts by the BoE.
• BoE's Mann said rates should stay high to curb inflation risks.
• The US Dollar may struggle amid rising concerns over Fed independence.

GBP/USD retraces its recent gains from the previous session, trading around 1.3450 during the Asian hours on Wednesday. The pair may regain its ground as the Pound Sterling (GBP) receives support from the dampened likelihood of further Bank of England (BoE) rate cuts, driven by persistent inflationary pressures. Inflation in the UK economy has been accelerating at a faster pace in recent months.

Catherine Mann, a member of the BoE Monetary Policy Committee (MPC), said on Tuesday that the bank rate should be held persistently to lean against inflation risks. She also stated, "I stand ready for a forceful policy action, in the form of larger, more rapid Bank Rate cuts, should the downside risks to domestic demand start materializing."

The GBP/USD pair depreciates as the US Dollar (USD) recovers its recent losses from the previous session. However, the upside of the Greenback could be restrained as traders remain cautious amid rising Fed concerns and the prospect of a more dovish Fed. US President Donald Trump announced early Tuesday that he was removing Fed Governor Lisa Cook from her position on the Fed's board of directors. This is considered the first instance of a president firing a central bank governor in the Fed's 111-year history. Trump also said that he was ready for a legal fight with Cook over falsified mortgage documents.

Fed Governor Cook's exit may increase the chances of earlier interest rate cuts, given Trump's ongoing pressure on the central bank to reduce borrowing costs. Traders are now pricing in more than 87% odds for a cut of at least a quarter-point at the Fed's September meeting, up from 84% previous day, according to the CME FedWatch tool.