GBP/USD holds ground above 1.3300 due to cautious remarks from BoE Mann

• GBP/USD maintains its position as the Pound Sterling receives support from the BoE's cautious stance.
• BoE Mann said that policy must remain restrictive for longer, while the inflation remains stubborn.
• The US Dollar could further advance as risk aversion increases amid the ongoing government shutdown.

GBP/USD inches higher after three days of losses, trading around 1.3310 during the Asian hours on Friday. The pair may appreciate as the Pound Sterling (GBP) may gain ground amid cautious sentiment surrounding the Bank of England's (BoE) monetary policy stance.

The BoE policymaker Catherine Mann said on Thursday that the monetary policy must remain restrictive for longer to create an environment conducive to growth. Mann also added that " Inflation remains persistent and the outlook for growth remains modest," per Reuters.

UK Chief Secretary to the Treasury James Murray said in a letter shared by the finance ministry on Wednesday that the administration would not permit agencies to use emergency funds to fund pay rises, aiming to restrict the wage spiral. "This prudent but tough approach to public spending is what will help build a stable economy," Murray added.

However, the GBP/USD pair may further lose ground as the US Dollar (USD) could receive further support from increased risk aversion, driven by the ongoing government shutdown. The US Senate remained deadlocked on legislation to end the government shutdown.

However, the Greenback may struggle due to prevailing dovish sentiment surrounding the US Federal Reserve's (Fed) policy outlook. Fed Bank of San Francisco President Mary Daly said on Friday that inflation has come in much less than she had feared. Daly further stated that the US central bank is projecting additional cuts in risk management.

Fed Governor Michael Barr said that the current outlook poses challenges for judging the stance of monetary policy and deciding the right path forward. Barr also noted that the Fed's rate cut in September was appropriate, and the current policy rate is still modestly restrictive. He added that it's hard to judge at this point whether the federal government shutdown will leave an imprint on the overall economy.