GBP/USD whips but sees little momentum as markets digest middling Fed Powell comments

GBP/USD tested lower, but recovered to nearly flat on the day post-Fed.
Fed held rates steady as rate futures broadly anticipated.
Fed Chair Powell: the Fed doesn't act until seeing more than we see now.

Joshua Gibson FXStreet

On Wednesday, GBP/USD fluctuated, dipping below 1.2420 before rising back to 1.2450 as the ongoing battle between bulls and bears resulted in less-than-noteworthy intraday volatility. The Federal Reserve (Fed) kept rates unchanged, as expected by rate futures markets, with Fed Chair Jerome Powell emphasizing their data-driven strategy for rate modifications.

Chair Powell highlighted that the Federal Open Market Committee (FOMC) is monitoring the policies enacted by US President Donald Trump closely, but he confirmed that President Trump has not communicated directly with the Fed. As an independent federal entity, the White House exerts minimal influence over the Federal Reserve's policy directions. Additionally, Powell remarked that while inflation is gradually approaching the median target levels, the current economic conditions, alongside concerns regarding President Trump’s extensive trade policies, mean the Fed is not in a hurry to alter the restrictiveness of monetary policy rates.

Furthermore, rate markets have reduced their expectations for Fed rate cuts in 2025. Based on the CME's FedWatch Tool, rate futures markets anticipate no changes in the federal funds rate until at least June.

GBP/USD one-hour chart

Economic Indicator

Fed Interest Rate Decision

The Federal Reserve (Fed) deliberates on monetary policy and makes a decision on interest rates at eight pre-scheduled meetings per year. It has two mandates: to keep inflation at 2%, and to maintain full employment. Its main tool for achieving this is by setting interest rates – both at which it lends to banks and banks lend to each other. If it decides to hike rates, the US Dollar (USD) tends to strengthen as it attracts more foreign capital inflows. If it cuts rates, it tends to weaken the USD as capital drains out to countries offering higher returns. If rates are left unchanged, attention turns to the tone of the Federal Open Market Committee (FOMC) statement, and whether it is hawkish (expectant of higher future interest rates), or dovish (expectant of lower future rates).

EUR/USD climbs to daily highs near 1.1820

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GBP/USD trims losses, retests 1.3460

After briefly challenging its key 200-day SMA near 1.3440, GBP/USD now manages to regain some balance and revisit the 1.3460 zone on Friday. Cable’s pullback comes as the selling pressure on the Greenback gathers traction, reigniting some recovery in the risk-linked space.

Gold flirts with four-week highs past $5,200

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Bitcoin, Ethereum and Ripple consolidate with short-term cautious bullish bias

Bitcoin, Ethereum and Ripple are consolidating near key technical areas on Friday, showing mild signs of stabilization after recent volatility. BTC holds above $67,000 despite mild losses so far this week, while ETH hovers around $2,000 after a rejection near its upper consolidation boundary.

Breaking: US and Israel attack Iran, risk aversion to sweep global markets

Early Saturday, United States (US) President Donald Trump announced that the US had begun “major combat operations” in Iran, following Israel’s pre-emptive missile attacks against Tehran.

Starknet unveils strkBTC, shielded Bitcoin transactions on Ethereum Layer 2

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