Fed Holds Rates Steady, Sterling Sees Unexpected Refund

The British Pound Sterling surged after the Federal Reserve's decision to hold interest rates at 3.50% to 3.75%, sparking a 40-pip spike into the 1.3350 area.

Despite futures pricing carrying better than a third of a hike into the meeting, the Fed chose not to raise rates, prompting Sterling to interpret this as a 'refund' rather than a warning.

The Chair's press conference at 18:30 GMT will provide further insight into the Fed's decision-making process and forward guidance, which will be crucial for investors.