On Tuesday, the British pound continued to come under pressure against the U.S. dollar. The GBP/USD pair fell to levels last seen in April, amid the overall strengthening of the dollar and growing concerns over the UK budget. As of now, the pair is trading around 1.3047, down roughly 0.7% for the day.

The U.S. Dollar Index (DXY) — which tracks the greenback against a basket of six major currencies — is rising for the fifth consecutive day, breaking through the psychological 100.00 level and reaching its August highs. This marks a new three-month high, reflecting the waning expectations of a December interest rate cut by the Federal Reserve.

UK-linked assets came under pressure after Chancellor Rachel Reeves delivered a speech preparing the public for "tough decisions" ahead of the November 26 budget announcement. In her remarks, Reeves emphasized the need to bring public debt under control, not ruling out tax increases. She also outlined plans to reform the corporate profit tax system to support local businesses. Reeves described the upcoming budget as "growth with fairness," noting that fiscal policy will be aimed at reducing inflation.

In addition, it was reported that the government is considering the introduction of a 20% "exit tax" on assets owned by citizens emigrating from the UK. Such a tax could potentially generate around £2 billion annually and would apply to assets such as company shares.

However, the main focus now shifts to the Bank of England's interest rate decision, expected on Thursday. Most analysts forecast the rate will be kept at 4.00%, while inflation remains around 3.8%, still well above the Bank's 2% target. Monetary policymakers are expected to act with caution.

According to the BHH Market View report, the expected fiscal tightening implies the possibility of greater monetary easing next year — roughly 50 basis points — which could further weigh on the pound's exchange rate. Market swaps currently estimate about a 30% probability of a 25-basis-point rate cut, bringing the rate down to 3.75% at the upcoming meeting.

In the United States, attention will focus on the ADP employment report, due on Wednesday. This report will provide an early indication of private-sector employment trends, since the ongoing government shutdown has delayed official labor-market data. As a result, market participants are relying on payroll data to gauge employment dynamics and assess the likelihood of another rate cut later this year.

From a technical perspective, note that the Relative Strength Index (RSI) has entered the oversold zone, suggesting a possible short-term correction before the next move. The key resistance level now lies near the 1.3100 level, while the pair has found support around 1.3030.

Below is a table showing the percentage changes in the British pound's exchange rate against major currencies today. The most notable movement is observed in the GBP/NZD pair.