🚨 Pound Surge 2025: GBP/USD Rockets to 4-Year Highs Amid Fed Uncertainty
Sterling Strength Returns as U.S. Dollar Wobbles
A sharp resurgence in the British pound has grabbed headlines today as GBP/USD surged toward its strongest level in nearly four years. Driven by a weakening U.S. dollar and a cautious Bank of England, the currency pair—listed as GBP/USD on the Forex market—now trades around 1.3740, a 2.2 % gain this week.
Market Volatility Explodes Following Trump’s Fed Comments
Markets are reacting to renewed Fed uncertainty: President Trump’s public criticism of Fed Chair Powell and talk of an early replacement have shaken confidence in U.S. central bank independence, weakening the dollar for the fourth straight day. Meanwhile, risk-on sentiment fueled by easing Middle‑East tensions has lifted demand for sterling.
BoE Caution Boosts Confidence in the Pound
Domestically, the pound draws support from the Bank of England’s slower pace on rate cuts compared to peers, amid persistently sticky inflation and signs of a cooling labor market. Governor Andrew Bailey has flagged a slowdown in hiring, attributing it partly to rising National Insurance contributions.
UK Political Drama Adds Fuel to the Fire
Political developments are adding to the mix: internal pushback forced PM Keir Starmer to retreat on major welfare cuts, spotlighting the UK’s fiscal pressures—including a large debt‑to‑GDP ratio and current account deficit.
GBP/USD Targets 2021 Highs—But For How Long?
With GBP/USD now testing its highest levels since late 2021, analysts warn of potential downside once markets refocus on the UK's fiscal situation. But for the moment, dollar vulnerability and sterling strength are delivering momentum.