Sterling Stagnant Ahead of Fed Rate Decision

The British pound remained largely flat against the US dollar and euro on Monday as traders held their positions ahead of the Federal Reserve's interest rate decision. The Fed is widely expected to announce a hold, with markets pricing in a high probability of this outcome.

This expectation has kept the US dollar index relatively stable, limiting significant moves in major currency pairs. Sterling was trading around the $1.27 mark against the dollar, showing little change from the previous session's close. Against the euro, sterling was also steady, with the EUR/GBP pair hovering near 0.85.

The Fed's decision is the primary driver of short-term direction for the pound. A hawkish surprise, such as a rate hike or more aggressive forward guidance, could strengthen the dollar, putting downward pressure on GBP/USD. Conversely, a dovish outcome might weaken the dollar, providing a tailwind for sterling.