The British pound remains on the defensive near a multi-month low reached during the Asian session, dropping to the level last seen on March 16 of the current year.

Following the unexpected decision of the Bank of England to pause its tightening cycle and keep the interest rate unchanged, the British pound (GBP) continues to exhibit relatively weak dynamics. This marked the first time since December 2021 that the Bank of England did not raise interest rates.

Additionally, the BoE lowered its economic growth forecast for July–September to 0.1%, compared to the previous forecast of 0.4%. It provided little indication of its intention to raise rates again.

The U.S. Dollar Index, which tracks the U.S. dollar's exchange rate against a basket of currencies, has risen to its highest level since November 2022 and continues to be well-supported by growing recognition that the Federal Reserve will maintain its hawkish stance.

As a result, markets anticipate the possibility of another rate hike by the end of the year. Federal Reserve Bank of Cleveland President Loretta Mester stated that the U.S. central bank will need to maintain its current monetary policy to bring inflation back to the 2% target level.

Such statements and intentions push U.S. Treasury bond yields to new multi-year highs and continue to support the U.S. dollar.

Furthermore, there will be no significant economic data releases from the UK for the rest of this week that could impact the market, leaving the GBP/USD pair at the mercy of the U.S. dollar's price dynamics.

The U.S. Non-Farm Payrolls (NFP) report, which will be released on Friday, will also be in focus.

For now, the fundamental backdrop suggests that the path of least resistance for spot prices in the GBP/USD pair is to the downside.