⚡ British Pound tumbles as Warsh revives Fed hike bets

The British Pound plunged against the US Dollar on Friday following hawkish comments from Federal Reserve Chair Kevin Warsh that have dramatically shifted market expectations for US interest rates. The GBP/USD pair dropped 0.40% to trade at 1.3538 as Warsh signaled inflation control remains the Fed’s top priority, significantly raising the probability of an interest rate hike later this year.

The remarks have strengthened the Greenback across major currency pairs as traders rapidly reprice Fed policy expectations. Sterling bore the brunt of dollar strength, with the selloff reflecting renewed conviction that US rates may climb while other central banks maintain more accommodative stances. The hawkish pivot catches markets that had grown comfortable with the prospect of steady or declining US rates.

Traders holding long GBP positions face immediate pressure, while dollar bulls are gaining momentum heading into the weekend. The rate divergence narrative between the Fed and Bank of England is widening.

FXnCO Insight

Consider reducing GBP exposure and monitoring upcoming Fed speaker commentary, as further hawkish signals could drive GBP/USD toward the 1.35 support level.

Source: FXStreet