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Fed Drama Dampens Sterling
Wednesday, 27 August 2025 08:16 WIB | GBP/USD |GBP/USD

GBP/USD recovered from an early-week correction on Tuesday, bouncing from a new technical floor around 1.3450. The currency pair returned to sideways movement within a familiar range as global market sentiment tended to pause awaiting the release of more important US economic data.

Wednesday is expected to be a quiet session, with virtually no major data coming from either the US or Europe. Investors are still monitoring political headlines from the Trump administration while awaiting developments on President Donald Trump's efforts to "fire" Dr. Lisa Cook from the Fed's Board of Governors—an issue that has sparked debate about the central bank's independence.

The data cycle picks up again on Thursday with the release of quarterly US GDP. Consensus is forecasting growth of 3.1% (annualized), which, if matched or stronger, could strengthen the dollar and curb sterling's gains. Conversely, a disappointing result could weaken the dollar and give GBP some breathing room.

However, the key event is Friday: the PCE Index (the Fed's benchmark inflation). The PCE is expected to strengthen slightly again; Higher inflation could make it difficult for the Fed to follow through with its planned September 17th interest rate cut, thus holding down GBP/USD. Until the data is released, cable is likely to remain hovering around 1.3450–1.35, with the bias determined by policy news and risk sentiment

Source: Newsmaker.id

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