The GBP/USD pair shows volatility due to diverging policies of the Bank of England and the U.S. Federal Reserve, impacting currency strength and inflation concerns.
The Bank of England's decision to hold interest rates unchanged at 4.75% reflects caution towards inflation, signaling a gradual approach to policy changes without clear indications for future direction.
In contrast, the U.S. dollar's strength is linked to the Fed's recent 25 basis point cut, as it seeks to bolster the economy amidst potential downturns.
Despite the Fed's restrained approach with projected rate cuts in 2025, the strong dollar poses challenges for the GBP/USD pair, limiting the pound's growth.
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