Pound Slips as Dollar Steadies After Fed Rate Cut Signals
The British pound slipped against the US dollar after the Federal Reserve's latest policy decision. The dollar index (DXY) fell to a three-month low following Fed Chair Jerome Powell's indication that rate cuts were on the table for 2026 but not imminent.
This led to a sell-off in the greenback, with the GBP/USD pair trading lower by approximately 0.3% to around 1.27. However, by the next trading session, the dollar found its footing as traders locked in profits and turned attention to upcoming US economic data.
The pound's decline is also tied to domestic factors, with the Bank of England (BoE) widely expected to cut interest rates in its upcoming meeting. Markets are pricing in a 70% probability of a 25-basis-point reduction, driven by weak retail sales and a cooling labor market.