British Pound hangs near one-week low, eyes 1.3300 as Fed hike bets lift USD
The GBP/USD pair turns lower for the second straight day following an intraday uptick to the 1.3355 region on Wednesday, sliding back closer to a one-and-a-half-week low, which it touched the previous day.
The GBP/USD pair slipped for the second consecutive day, nearing a one-week low near 1.3300. However, it remained above the critical level, prompting caution among traders. The US Dollar (USD) surged to a near one-week high, driven by expectations of aggressive rate hikes by the Federal Reserve (Fed) and comments from Fed Governor Christopher Waller.
Additionally, geopolitical tensions between the US and Iran, along with ongoing tanker attacks in the Strait of Hormuz, added to the USD's strength. Investors remained optimistic about a potential diplomatic resolution to the US-Iran conflict, which could stabilize the USD and limit further GBP/USD depreciation. Meanwhile, the Bank of England's (BoE) hawkish stance provided some support for the British Pound (GBP), with Deputy Governor Clare Lombardelli indicating further interest rate increases were likely due to high energy prices and the UK's economic resilience. To confirm the recent GBP/USD decline, the pair needed to break below the 1.3300 level.
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