The British pound against the US dollar rises to about 1.3470 during the early part of the European trading session on Tuesday.
New worries about the Fed's independence are making the US Dollar weaker compared to the Cable.
Traders are waiting for the US December CPI inflation data on Tuesday, hoping it will give them new momentum.
The GBP/USD pair moves up to close to 1.3470 in the early European session on Tuesday. The US dollar weakens against the British pound (GBP) after the US Department of Justice warns of potentially charging Federal Reserve (Fed) Chair Jerome Powell with wrongdoing related to comments he made to Congress about a building renovation project.
Powell said on Sunday that the Fed has been given subpoenas by the Justice Department regarding comments he made to Congress last summer about cost overruns on a $2.5 billion building renovation project at the central bank's main office in Washington.
He called the threats a "pretext" to apply pressure on the Fed to reduce interest rates. This headline worries people about the Fed's independence, which puts some downward pressure on the US Dollar (USD) and helps major currency pairs.
The Bank of England lowered its interest rate to 3.75% during its December meeting. It is likely to reduce rates again in 2026 as inflation starts to go down and the UK job market stays tough. However, the bank officials say that future rate cuts will be more uncertain and harder to decide.
If the Bank of England takes a more cautious approach, it might make the British pound weaker against the US dollar. A lot of experts think the UK central bank will keep interest rates the same in February. The next possible rate cut of 0.25% is probably going to happen in either March or April this year.
Traders will look more closely at the US December Consumer Price Index (CPI) inflation data, which will come out later on Tuesday. The overall and core US CPI are expected to rise by 2.7% compared to the same time last year. These numbers might give some clues about the future direction of US interest rates.
New worries about the Fed's independence are making the US Dollar weaker compared to the Cable.
Traders are waiting for the US December CPI inflation data on Tuesday, hoping it will give them new momentum.
The GBP/USD pair moves up to close to 1.3470 in the early European session on Tuesday. The US dollar weakens against the British pound (GBP) after the US Department of Justice warns of potentially charging Federal Reserve (Fed) Chair Jerome Powell with wrongdoing related to comments he made to Congress about a building renovation project.
Powell said on Sunday that the Fed has been given subpoenas by the Justice Department regarding comments he made to Congress last summer about cost overruns on a $2.5 billion building renovation project at the central bank's main office in Washington.
He called the threats a "pretext" to apply pressure on the Fed to reduce interest rates. This headline worries people about the Fed's independence, which puts some downward pressure on the US Dollar (USD) and helps major currency pairs.
The Bank of England lowered its interest rate to 3.75% during its December meeting. It is likely to reduce rates again in 2026 as inflation starts to go down and the UK job market stays tough. However, the bank officials say that future rate cuts will be more uncertain and harder to decide.
If the Bank of England takes a more cautious approach, it might make the British pound weaker against the US dollar. A lot of experts think the UK central bank will keep interest rates the same in February. The next possible rate cut of 0.25% is probably going to happen in either March or April this year.
Traders will look more closely at the US December Consumer Price Index (CPI) inflation data, which will come out later on Tuesday. The overall and core US CPI are expected to rise by 2.7% compared to the same time last year. These numbers might give some clues about the future direction of US interest rates.
