GBP/USD ticked up in early Asian trading on Wednesday, hovering near 1.3300 after ending the prior session little changed. The move reflected a softer US Dollar as markets positioned ahead of the Federal Reserve’s policy decision, with rate expectations still finely balanced.
Fed Interest Rate Expectations
The Fed is broadly anticipated to keep interest rates on hold, yet derivatives positioning points to a 30.5% implied chance of an immediate hike, underscoring the degree of uncertainty into the announcement.
Outlook for Borrowing Costs
Further out, pricing indicates a 76.6% probability of a rate increase in September, supporting the view that borrowing costs may stay higher for longer.
