GBP/USD Steadies Above 1.3450 Amid Dollar Weakness

The British pound is maintaining its strength against the U.S. dollar, holding steady above the 1.3450 mark. This stability can be attributed to a softer dollar, which is under pressure from both geopolitical developments and repriced Federal Reserve policy expectations.

The dollar's weakening is largely due to market participants pricing in a higher probability of rate cuts in 2025 following softer economic data and cautious commentary from Fed officials. This repricing reduces the yield advantage of dollar-denominated assets, making the greenback less attractive.

The pound is also drawing support from domestic factors, including the Bank of England's relatively hawkish stance compared to the Fed, with interest rates remaining elevated. The UK economy has shown resilience, with stronger-than-expected GDP figures and a tight labor market reducing bets on imminent BoE rate cuts.