The GBP/USD pair shows strength, approaching 1.3255 during the early Asian session on Monday. The Federal Reserve is expected to maintain the current interest rates during its upcoming meeting in March on Wednesday. The Bank of England is anticipated to keep the rates steady on Thursday. The GBP/USD pair is showing strength around 1.3255 in the early European session on Monday, supported by a decline in the US Dollar. The major pair is presently positioned close to its lowest level since December 2025. Market participants may adopt a more cautious stance as they await the interest rate decisions from the US Federal Reserve and the Bank of England later this week.
The Federal Reserve is anticipated to maintain the benchmark federal funds rate within the existing range of 3.50%–3.75% at its forthcoming meeting in March on Wednesday. In light of ongoing inflation concerns, numerous experts have revised their forecasts for the upcoming rate cut to September. “The war … poses downside risk to economic growth and upside risks to inflation, so central bank responses will very much depend on the recent context, specifically whether inflation has been above, on, or below target,” stated Carol Kong.
The expectation is that the UK central bank will maintain interest rates at 3.75% during its meeting on Thursday. Economists from Oxford indicated that a worst-case scenario involving oil prices reaching $140 a barrel would significantly elevate inflation and potentially lead the UK economy into a mild recession.