GBP/USD extended losses for a fifth straight session on Thursday, hovering near 1.3340 during Asian trading hours. The pair weakened as traders grew cautious ahead of Friday’s US inflation data, with the ongoing government shutdown triggering a “data blackout” and heightening risk aversion.

The US Dollar found support after President Donald Trump expressed optimism about reaching several trade agreements with Chinese leader Xi Jinping during their upcoming meeting in South Korea. Market sentiment was also shaped by expectations of further Federal Reserve rate cuts, with futures pricing a 97% chance of a 25 bps reduction in October.

Meanwhile, the Pound Sterling faced renewed selling pressure after UK inflation data came in softer than expected. September CPI rose 3.8% year-on-year versus forecasts of 4.0%, while core CPI eased to 3.5%. The reading remains well above the Bank of England’s 2% target but reinforced concerns over slowing price growth.

With both the US data void and softer UK inflation dampening momentum, traders may remain cautious until clearer policy signals emerge from the Fed and the BoE.