The British pound weakens against the dollar after the Federal Reserve maintains hawkish guidance, pressuring GBP/USD before Thursday’s Bank of England rate decision.
The GBP/USD pair dropped to 1.3345 in early European trading on Thursday, extending losses as the US dollar strengthened. Hawkish signals from the Federal Reserve, which held rates steady but indicated a prolonged restrictive stance, supported the greenback’s advance.
Prior to the decline, GBP/USD had traded near 1.3400, with investors weighing the Fed’s policy outlook against expectations for the Bank of England’s upcoming rate decision. The pair’s move reflects broader USD strength amid elevated Treasury yields and geopolitical tensions in the Middle East.
Markets now await the BoE’s announcement, with traders pricing in potential rate cuts later this year despite persistent inflation concerns in the UK.