Investors await the Federal Reserve’s rate decision at 18:00 GMT, with markets pricing a 69.5% chance of unchanged rates.
The British Pound trades slightly higher at 1.3300 against the US Dollar in European trading, supported by a modest decline in the US Dollar Index to 101.30. The Fed’s upcoming policy announcement is the key driver, with traders cautious ahead of the decision.
Markets expect the Fed to hold rates steady at 3.50%-3.75%, consistent with its last four meetings. Attention will shift to the policy statement and Fed Chair remarks for clues on inflation and economic outlook amid Middle East tensions. The Bank of England’s decision follows on Thursday, with rates likely unchanged at 3.75%.
Analysts note a 7-2 majority supports steady BoE policy, though hawkish dissenters may fuel debate over future tightening. The near-term bias for GBP/USD remains bearish as traders await clarity from both central banks.