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GBP/USD eases as Fed uncertainty steadies the US dollar

CME FedWatch pricing shows nearly a 38% chance of a July rate hike and about 81.4% odds for at least a 25-basis-point hike in September.

Reported · Written up by our desk · Major Pairs

GBP/USD edged lower while the US dollar held steady, with traders showing caution ahead of the Federal Reserve policy decision due Wednesday, FXStreet reports. The pair was last around 1.3290 during Asian hours.

According to the CME FedWatch Tool, markets are pricing nearly a 38% chance of a July rate hike. The outlook for later policy also remains firm, with the probability of at least a 25-basis-point hike in September at approximately 81.4%.

The US dollar displayed resilience even after President Donald Trump said the US is in “good talks” with Iran to resolve the Middle East conflict. FXStreet notes Washington suspended its 13-night strike campaign over the weekend, resulting in three consecutive days without attacks.

For the pound, focus is shifting to the Bank of England policy decision Thursday, where rates are widely expected to be held steady at 3.75%. FXStreet adds that recent data showed UK annual consumer price growth slowed to a 15-month low of 2.6% in June, below the BoE’s own projections.

Latest closeGBP/USD 1.329 ▼0.2%

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