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GBP/USD slips from weekly highs as USD firms ahead of BoE

GBP/USD was down more than 0.1% on the day, trading around the mid-1.3300s, after the Fed held rates but remained divided and kept policy less aggressive.

Reported · Written up by our desk · Major Pairs

FXStreet reports that the GBP/USD pair failed to extend a rebound to the prior day’s weekly high and drifted lower during the Asian session on Thursday. Spot prices were last around the mid-1.3300s, down over 0.10% for the day.

The outlet attributes the pressure on GBP/USD to renewed strength in the US dollar. After the US Federal Reserve held interest rates steady at the end of a two-day meeting Wednesday, it refrained from a more aggressive stance, weighing on the greenback earlier.

FXStreet also points to the Fed decision’s split vote, with three dissents in a 9 to 3 outcome. It adds that traders are still pricing a higher chance of at least one rate hike by year end amid shifting inflation expectations tied to volatile oil prices, alongside an escalation of Middle East tensions that can support the USD.

Attention is now shifting to the Bank of England’s interest rate decision later today, with additional US data expected afterward, including the Advance Q2 GDP report and the Personal Consumption Expenditures price index. FXStreet says market pricing may hinge on whether the BoE is hawkish or dovish on inflation, and it expects geopolitical headlines to influence USD price action around the pair.

Latest closeGBP/USD 1.337 ▲0.6%

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