Investors concerns about the economic outlook provided by Andrew Bailey, the Governor of the Bank of England (BoE), and Federal Reserve Chairman Jerome Powell, as there is a risk that the UK economy may enter a downturn, leading to the BoE possibly reducing interest rates in August 2024 or even earlier, depending on economic conditions at that time.

The contraction of the UK economy and BoE's interest rate cuts in 2024 are expected to have a negative impact on the GBP. Despite predictions of a global economic downturn, a more severe downturn may occur in the UK due to reduced competitiveness in recent times.

According to Jerome Powell, the tightening financial conditions and economic contraction are enough to control inflation, which leads investors to anticipate that the Fed will keep interest rates unchanged until early next year, causing a rapid weakening of the US dollar.

However, some FOMC members still have a desire to raise interest rates further to ensure that inflation does not resurface, but economic data will be closely monitored in the future.