The British Pound (GBP) is making gains against the US Dollar (USD) on Thursday, October 22, 2026, as the USD weakens ahead of the Federal Reserve's upcoming policy meeting. The GBP/USD pair is trading at one-month highs just above 1.3400, marking a 1.4% rally over the past two weeks.
Recent UK data shows that high energy prices are driving up consumer inflation, increasing pressure on the Bank of England (BoE) to raise interest rates in November. Last week's GDP data also indicated continued economic growth, which could influence the BoE's decision at its November 5 meeting. BoE Governor Andrew Bailey is expected to speak later in the day, potentially offering more insights into the central bank's outlook.
The US Dollar is struggling amid lower Treasury yields, as investors anticipate that the Fed may not raise interest rates at next week's meeting. Fed Chair Warsh recently delivered a cautious message, avoiding commitments for the October and December meetings, while other officials have called for more time to assess the impact of September's rate hike.
Analysts at ING remain optimistic about the Pound, citing market confidence in the BoE's tightening cycle. The Dutch bank expects 25 basis point hikes in February and November, positioning the Pound as a high-carry European currency.