GBP/USD Falls to Six-Week Low After Hawkish Fed Decision

The GBP/USD pair has fallen to its lowest level since late July after a hawkish Federal Reserve rate decision. The pair dropped below 1.34, with the USD surging to a six-week high at 3.75%-4%.

The Fed hiked interest rates by 25 basis points, as expected, citing persistent inflation and energy pressures. 16 of the 18 policymakers are keen to raise rates again before the end of the year, with four seeing two hikes before the end of this year.

The market interpreted the rate decision as hawkish, lifting the U.S. dollar. In contrast, the Bank of England is expected to leave interest rates unchanged at 3.75% today, despite rising inflation and oil prices above $100 a barrel.