The British pound is trading steady around 1.3500 against the US dollar during the European trading session on Tuesday, close to its highest level in more than three months at 1.3535 hit last week. GBP/USD is consolidating as the US dollar fluctuates ahead of the release of the December Federal Open Market Committee (FOMC) meeting minutes, which will be published late in the New York session.
At press time, the US Dollar Index (DXY), which tracks the value of the dollar against six major currencies, is trading flat around 98.00.
Investors are awaiting the minutes of the Federal Open Market Committee meeting for detailed signals on policymakers’ views on the monetary policy outlook. At its latest policy meeting, the Fed cut interest rates for the third time this year, pushing them down to 3.50%-3.75%. The Fed’s summary of economic outlook, which included a dot plot, showed that policymakers collectively expect the federal funds rate to head to 3.4% by the end of 2026. This suggests there will be only one rate cut next year.
The expected rate cut by the Fed in 2026 is lower than market participants expect. According to the CME FedWatch tool, traders are very confident that the Fed will cut borrowing rates by at least 50 basis points before the end of 2026.
The price of the British pound today
The table below shows the percentage change of the British Pound (GBP) against the major currencies listed today. The British pound was the strongest against the US dollar.
| US dollars | euro | GBP | JPY | Canadian | Australian dollar | New Zealand dollar | Swiss franc | |
|---|---|---|---|---|---|---|---|---|
| US dollars | -0.03% | -0.12% | -0.16% | -0.10% | -0.27% | -0.10% | -0.15% | |
| euro | 0.03% | -0.09% | -0.11% | -0.06% | -0.24% | -0.06% | -0.12% | |
| GBP | 0.12% | 0.09% | -0.02% | 0.02% | -0.16% | 0.02% | -0.05% | |
| JPY | 0.16% | 0.11% | 0.02% | 0.07% | -0.12% | 0.04% | 0.03% | |
| Canadian | 0.10% | 0.06% | -0.02% | -0.07% | -0.17% | 0.03% | -0.07% | |
| Australian dollar | 0.27% | 0.24% | 0.16% | 0.12% | 0.17% | 0.18% | 0.10% | |
| New Zealand dollar | 0.10% | 0.06% | -0.02% | -0.04% | -0.03% | -0.18% | -0.07% | |
| Swiss franc | 0.15% | 0.12% | 0.05% | -0.03% | 0.07% | -0.10% | 0.07% |
The heat map shows the percentage changes in major currencies versus each other. The base currency is chosen from the left column, while the counter currency is chosen from the top row. For example, if you select the British pound from the left column and move along the horizontal line to the US dollar, the percentage change displayed in the box will represent GBP (base)/USD (quote).
Daily summary of market drivers: The UK labor market will be the highlight of 2026
- The British pound has been trading broadly strong against its major counterparts over the past few weeks in anticipation that the Bank of England (BoE) will slow the pace of interest rate cuts in 2026.
- At a policy meeting earlier this month, the Bank of England cut interest rates by 25 basis points to 3.75% and signaled that monetary policy would remain on a gradual downward path.
- The Bank of England maintained its gradual monetary easing outlook as UK inflation remains well above the 2% target, even after slowing in the past two months. The UK’s headline inflation rate slowed to 3.2% in November from the peak of 3.8% recorded in September.
- In 2026, the main driver of the Bank of England’s market outlook will be UK labor market conditions and GDP growth prospects. Labor demand in the UK remains weak in 2025, as employers restrict hiring to offset the impact of an increase in their contribution to social security schemes.
- In the United States, the main catalyst at the beginning of 2026 will be the White House announcement of a successor to Federal Reserve Chairman Jerome Powell. United States President Donald Trump said Monday that he will announce the new Federal Reserve Chairman sometime in January. The new Fed head is expected to favor aggressive monetary easing, with Trump saying last week that he wants the new central bank head to cut interest rates even if the market is performing well.
Technical Analysis: The GBP/USD pair is witnessing further rise towards the 1.3600 level
On the daily chart, the GBP/USD pair is trading at 1.3506. The 20-day EMA rises, and the price stabilizes above it, reinforcing the bullish bias. The RSI at 69 is near overbought territory, which could slow the advance. Measured from the high of 1.3791 to the low of 1.3008, the 61.8% retracement levels at 1.3491 have been overcome, and the next resistance lies at the 78.6% retracement levels at 1.3623.
Momentum will remain steady while the pair remains above the bullish average, with dips expected to find support around this dynamic line. A daily close across the 1.3623 barrier could open a trend towards higher highs, while rejection there will keep the pair in a range and encourage a pullback to ease extended momentum.
(The technical analysis for this story was written with the help of an artificial intelligence tool.)
Economic indicator
Minutes of the Federal Open Market Committee meeting
FOMC stands for the Federal Open Market Committee, which organizes 8 meetings a year and reviews economic and financial conditions, determines the appropriate stance of monetary policy and assesses risks to its long-term goals of price stability and sustainable economic growth. The minutes of the Federal Open Market Committee (FOMC) meeting are issued by the central bank’s Board of Governors Federal Reserve It is a clear guide to future US interest rate policy.
Read more.
Next release:
Tuesday 30 December 2025 at 19:00
repetition:
irregular
consensus:
–
former:
–
source:
Federal Reserve
FOMC minutes are typically published three weeks after the day the policy decision is made. Investors look for clues on the policy outlook in this post along with the vote split. The bullish tone is likely to provide a boost to the dollar while the dovish stance is seen as negative for the US dollar. It should be noted that market reaction to the FOMC minutes may be delayed due to news media not having access to the publication prior to release, unlike the FOMC policy statement.
