Fed Hike Sends Pound-to-Dollar Rate into Free Fall

The Federal Reserve's decision to raise interest rates has sent shockwaves through the global economy, particularly affecting the Pound-to-Dollar exchange rate.

The Fed raised its federal funds rate by 25 basis points to a range of 3.75% to 4.00%, with 16 out of 18 policymakers expecting at least one more hike before year-end and four pencilling in two.

This move has led to the Dollar rallying, causing the Pound-to-Dollar rate to fall 0.7% on Wednesday to 1.3382, its lowest level in seven weeks, leaving the Pound 2.2% lower against the Dollar in under a month.

Investment bank analysts predict further U.S. interest rate hikes ahead, which may continue to put downward pressure on the Pound.