GBP/USD picks up to 1.3180 with UK fiscal concerns still weighing

• The Pound hits session highs at 1.3180 against the US Dollar but remains trapped within previous ranges.
• Investors' concerns about UK's public finances and hopes of BoE rate cuts keep Pound bulls in check.
• Markets remain wary of risk with all eyes on the release of delayed US macroeconomic data.

The Pound has bounced up from session lows near 1.3135, to hit session highs near 1.3180, but remains moving within previous ranges, extending the choppy and sideways trading seen over the last few weeks. Ongoing concerns about the UK's public finances and hopes of BoE interest rate cuts are keeping GBP bulls in check

The pair whipsawed last week, following news that Prime Minister Keis starmer and Chancellor Rachel Reeves made a U-turn on their plans to increase the income tax at the November 26 budget. The news provides some relief to taxpayers but raises doubts about how to cover the country's expected fiscal deficit.

Weak UK data boost BoE cut hopes

On the macroeconomic front, things have not been much better. Preliminary Gross Domestic Product data released last week showed that the economy contracted against expectations in the third quarter, with manufacturing and industrial production slumping.

These figures have boosted investors' expectations that the Bank of England will be forced to cut its benchmark interest rate further in the coming months, probably as soon as December.

In the US, the federal government's reopening will allow for the release of a stream of delayed US data this week, with a special interest in September's Nonfarm Payrolls report, scheduled for next Thursday. In the meantime, a cautious market coupled with dwindling hopes of a Fed rate cut in December has been providing some support to the US Dollar.