Pound Sterling Hits Multi-Year High as US Dollar Weakens on Fed Uncertainty

Pound Sterling Winning Streak Against US Dollar Extends to Fourth Day

The British Pound (GBP) continued its ascent on Thursday, notching a fourth straight day of gains against the US Dollar (USD) as political tensions in the United States pressure the Greenback. The GBP/USD pair hit a high of 1.3765, marking its highest level in over three years.

Fed Turmoil Sends US Dollar Lower

The rally in the Pound coincides with renewed criticism of Federal Reserve Chairman Jerome Powell from President Donald Trump, who has voiced dissatisfaction with Powell’s wait-and-see policy stance. During Powell’s semi-annual testimony to Congress, he warned that tariff-driven inflation could become more persistent, but offered no clear timeline for rate cuts.

This ambiguity, coupled with rumors that Powell may be replaced as early as this summer, has weakened the US Dollar, as reflected in the US Dollar Index (DXY) falling to a three-year low around 97.00.

Political Interference Concerns Weigh on USD

Markets are increasingly worried about political interference in the Federal Reserve, an institution traditionally seen as independent. The Wall Street Journal reported that President Trump could soon announce a successor to Powell, raising concerns about the Fed's autonomy and the credibility of US monetary policy.

This uncertainty has led to a sharp drop in investor confidence in the USD, favoring alternative major currencies like the Pound.

UK Domestic News: Employment and Corporate Headlines

While the Pound’s gains have been largely driven by USD weakness, domestic UK news also played a minor role:

• UK employers are reportedly considering staff cuts to offset rising social security contributions.
• Shell has denied rumors of a potential acquisition bid for British Petroleum (BP), dismissing speculative merger chatter.

Related Tredu Reads:

• USD Outlook: Fed Drama Triggers Global Reaction
• GBP/USD Technical Analysis: Sterling Eyes 1.38
• Shell Denies BP Buyout Rumors – What’s Next?

Conclusion:
The GBP/USD rally reflects growing cracks in US economic leadership and currency confidence. With speculation mounting over Powell’s potential departure and continued criticism from the White House, markets are likely to favor currencies backed by perceived political and institutional stability—like the British Pound.

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