Fed rate hold amid hawkish split accompanies British Pound rebound

1.3300 is in sight as GBP/USD rebounds after the Fed leaves rates unchanged, as widely expected.
A 25-basis-point rate increase wins support from dissenters Cook and Hammack.
While recognising resilient growth and employment, the Fed cautions that inflation is still elevated.

GBP/USD trades near 1.3300. Sterling has regained some ground following the Federal Reserve’s widely expected decision to leave rates unchanged. The vote was 10–2, with the two dissenters backing a rate increase.

1.3300 in sight: GBP/USD rebounds after Fed pause, two dissenters back higher rates

TMGM Analysis: Financial Market News, Economic Calendar & Market Insights

Economic activity continues to expand, the Fed acknowledged. It said domestic spending “has been resilient, that productivity growth is strong and that capital investment is robust.” On its employment mandate, the Fed observed: “Job gains have kept pace with the workforce, and the unemployment rate has changed little.”

Although inflation remains elevated, the central bank opted not to raise rates. It wants more information to better assess the appropriate policy stance.

Governor Lisa Cook and Cleveland Fed President Beth Hammack cast the dissenting votes, both favouring a 25-basis-point rate increase.

1.3305: GBP/USD steady after Fed decision

With the decision matching expectations, the market response was subdued. GBP/USD trades around 1.3305. The day’s high (HOD) at 1.3312 marks the next resistance level, while initial support lies at the day’s low of 1.3272.

Pound Sterling: Today’s Performance

British Pound (GBP) recorded its strongest performance against the New Zealand Dollar today. The table below sets out its percentage changes against the major currencies listed.

	USD	EUR	GBP	JPY	CAD	AUD	NZD	CHF
USD		-0.11%	0.02%	0.21%	-0.08%	-0.15%	1.12%	0.11%
EUR	0.11%		0.13%	0.32%	0.04%	-0.05%	1.23%	0.21%
GBP	-0.02%	-0.13%		0.19%	-0.10%	-0.18%	1.08%	0.08%
JPY	-0.21%	-0.32%	-0.19%		-0.31%	-0.36%	0.92%	-0.11%
CAD	0.08%	-0.04%	0.10%	0.31%		-0.05%	1.22%	0.20%
AUD	0.15%	0.05%	0.18%	0.36%	0.05%		1.27%	0.26%
NZD	-1.12%	-1.23%	-1.08%	-0.92%	-1.22%	-1.27%		-1.02%
CHF	-0.11%	-0.21%	-0.08%	0.11%	-0.20%	-0.26%	1.02%

Percentage movements between major currencies are displayed in the heat map. Select the base currency in the left-hand column and the quote currency in the top row. For instance, choosing British Pound on the left and following its row across to US Dollar gives the percentage change for GBP (base)/USD (quote) in the intersecting cell.