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Pound Pressures US Dollar Ahead of Fed-BoE Monetary Policy
Monday, 5 May 2025 20:35 WIB | GBP/USD |GBP/USD

The British pound (GBP) surged higher to near 1.3330 against the US dollar (USD) during North American trading hours on Monday (05/05), rebounding from a fresh weekly low around 1.3260 earlier in the day. The GBP/USD pair moved higher as the US dollar (USD) faced strong selling pressure ahead of the Federal Reserve's (Fed) monetary policy decision, which is due to be announced on Wednesday.

According to the CME FedWatch tool, the market is almost fully pricing in the central bank to keep interest rates unchanged in the range of 4.25%-4.50%. Therefore, the main trigger for the US dollar will be the monetary policy direction by the Fed and its Chairman, Jerome Powell, for the remainder of the year.

Fed officials have stated that adjusting monetary policy would be appropriate only if they see cracks in the labor market and economy. However, the latest US Nonfarm Payrolls data for April showed a better-than-expected job growth trend despite President Donald Trump's tariff policies. Moreover, the Q1 Gross Domestic Product (GDP) data was not as bad as it seemed at first glance, as the contraction was driven by a strong increase in imports.

Source: FXStreet

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