British Pound regains ground as Fed keeps rates unchanged amid hawkish divisions

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

The Pound Sterling regains some lost ground, with GBP/USD trading near 1.3300, after the Federal Reserve's widely anticipated decision to leave interest rates unchanged. The vote was 10–2, with the two dissenting members backing a rate increase.

Why is GBP/USD recovering towards 1.3300 despite two Fed dissenters backing higher rates?

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

On economic conditions, the Fed noted continued expansion in activity and said domestic spending “has been resilient, that productivity growth is strong and that capital investment is robust.” Turning to its employment mandate, the central bank observed: “Job gains have kept pace with the workforce, and the unemployment rate has changed little.”

Although inflation remains elevated, according to the central bank, it opted not to raise rates so it could gather further information and better assess the appropriate policy stance.

Governor Lisa Cook and Cleveland Fed President Beth Hammack cast the two dissenting votes at the meeting, backing a 25-basis-point rate increase.

How did GBP/USD respond to the Fed’s decision?

With the decision matching expectations, the price response remained subdued. Trading around 1.3305, GBP/USD faces its next resistance at the day's high (HOD) of 1.3312, while initial support lies at the day's low of 1.3272.

How Is Pound Sterling Performing Today?

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

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