GBP/USD hovers around 1.2400 ahead of FOMC decision

The GBP/USD pair fluctuates around 1.2370s, though it remains positive ahead of the Fed’s decision. UK inflation eased beneath the 11% threshold, which could cement a 50 bps rate hike by the BoE on Thursday.

The GBP/USD climbs in the US session as traders brace for the Federal Reserve’s (Fed) last monetary policy meeting, which will likely unveil a 50-bps rate hike and release its update in the Summary of Economic Projections (SEP). Hence, the GBP/USD is trading at around 1.2393, registering gains of 0.28% after hitting a high of 1.2400.

US equities are set to open mixed, as shown by the futures market. A light economic calendar in the United States (US), except for the Federal Reserve Open Market Committee (FOMC) interest rate decision around 18:00 GMT, refrains traders from opening fresh long/short bets in the GBP/USD.

Since Jerome Powell’s speech on November 30, opening the door for smaller rate hikes, as soon as the December meeting, sent the GBP/USD rallying close to 4.50%.