GBP/USD Stabilizes Ahead of BoE Hike Decision and Fed Interest Rate Move

The GBP/USD currency pair has stabilized near support as traders await key economic data releases from both the UK and the US. The Bank of England (BoE) is expected to keep its interest rate at 3.75%, but there's a growing likelihood of a hike later this year, with November and December being favored.

The BoE's Monetary Policy Committee members have shown increasing hawkishness, with three voting for a 25bp hike in July. Today's UK CPI figures may provide an early indication of whether such a shift is likely.

Meanwhile, the Federal Reserve (Fed) decision will also be closely watched, with markets pricing in a near-90% probability of a 25bp hike and many economists expecting the same. The FOMC meeting's Summary of Economic Projections (SEP) update may reveal how hawkish policymakers are heading into next year.

If the Fed falls short of market expectations, it could lead to a pullback in the US dollar, potentially benefiting the GBP/USD pair, which is sitting near key support levels.