The Fed's decision has been made, and the market is focusing on the Bank of England's interest rate decision.
2025-09-18 13:26:29
At its September meeting, the Federal Reserve announced its first interest rate cut of the year, lowering the target range for the federal funds rate to 4.0%–4.25% .
"This rate cut is part of risk management and does not mean quick action is needed," said Federal Reserve Chairman Powell.
This statement cooled market bets on further aggressive interest rate cuts, thereby boosting the US dollar index to rebound and putting pressure on GBP/USD to fall.
The Bank of England's Monetary Policy Committee (MPC) will announce its decision on Thursday, with the market generally expecting it to maintain its base rate at 4.0%. The central bank previously lowered its interest rate from 4.25% to 4.0% in August. Financial markets currently expect the Bank of England to avoid further rate cuts before April 2026, with a high probability of remaining on hold for the rest of the year.
On Friday, UK retail sales data for August will be released. Markets expect overall retail sales to rise 0.4% month-over-month, and 0.3% excluding fuel. If the results are better than expected, the British pound could find some support, contributing to a short-term rebound in the GBP/USD pair.
GBP/USD continues to decline on the daily chart, currently trading around 1.3615. The short-term 5-day moving average has turned downward, suppressing any rebound in the exchange rate. The MACD kinetic energy column has weakened, indicating that downward momentum is still being released.
Key support lies at 1.3600, a break of which could lead to further declines to 1.3550. Initial resistance lies at 1.3680–1.3700, a break of which could trigger a rebound towards 1.3750. Overall, the daily chart structure is weak, suggesting continued downward pressure in the short term.
Editor's opinion:
Currently, the US dollar remains strong due to the Federal Reserve's relatively dovish interest rate cut path, while the Bank of England's cautious stance has left the British pound lacking upward momentum. If the UK retail sales data performs poorly, the GBP/USD pair may continue to come under pressure and test below 1.3600.
However, if the data unexpectedly turns positive, it could trigger a technical rebound. Therefore, the short-term trend depends more on the data performance and market sentiment, while the medium-term trend still depends on the evolution of the policy differences between the Federal Reserve and the Bank of England.
"This rate cut is part of risk management and does not mean quick action is needed," said Federal Reserve Chairman Powell.
This statement cooled market bets on further aggressive interest rate cuts, thereby boosting the US dollar index to rebound and putting pressure on GBP/USD to fall.
The Bank of England's Monetary Policy Committee (MPC) will announce its decision on Thursday, with the market generally expecting it to maintain its base rate at 4.0%. The central bank previously lowered its interest rate from 4.25% to 4.0% in August. Financial markets currently expect the Bank of England to avoid further rate cuts before April 2026, with a high probability of remaining on hold for the rest of the year.
On Friday, UK retail sales data for August will be released. Markets expect overall retail sales to rise 0.4% month-over-month, and 0.3% excluding fuel. If the results are better than expected, the British pound could find some support, contributing to a short-term rebound in the GBP/USD pair.
GBP/USD continues to decline on the daily chart, currently trading around 1.3615. The short-term 5-day moving average has turned downward, suppressing any rebound in the exchange rate. The MACD kinetic energy column has weakened, indicating that downward momentum is still being released.
Key support lies at 1.3600, a break of which could lead to further declines to 1.3550. Initial resistance lies at 1.3680–1.3700, a break of which could trigger a rebound towards 1.3750. Overall, the daily chart structure is weak, suggesting continued downward pressure in the short term.
Editor's opinion:
Currently, the US dollar remains strong due to the Federal Reserve's relatively dovish interest rate cut path, while the Bank of England's cautious stance has left the British pound lacking upward momentum. If the UK retail sales data performs poorly, the GBP/USD pair may continue to come under pressure and test below 1.3600.
However, if the data unexpectedly turns positive, it could trigger a technical rebound. Therefore, the short-term trend depends more on the data performance and market sentiment, while the medium-term trend still depends on the evolution of the policy differences between the Federal Reserve and the Bank of England.
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