Should We Keep an Eye on the Pound’s Upside Potential as It Strengthens Alongside the U.S. Dollar Following the FOMC Meeting?

Should We Keep an Eye on the Pound’s Upside Potential as It Strengthens Alongside the U.S. Dollar Following the FOMC Meeting?

18.09.2025

In the U.S. currency market yesterday, the U.S. dollar held firm despite the Federal Open Market Committee (FOMC) cutting the policy rate by 0.25%—the first rate cut in five meetings—as expected by the market, as the committee signaled it would refrain from significant rate cuts in the future.The EUR/USD pair briefly surged to 1.1918, setting a new year-to-date high, but subsequently lost momentum and fell back to 1.1809. On the weekly chart, the RSI and candlestick patterns are showing signs of divergence.

Among European currencies, the pound was the second-strongest after the U.S. dollar. The pound/yen pair rose from 199.476 to 200.352.On the hourly chart, the price rose from the -3σ to the +3σ Bollinger Bands. On the 4-hour chart, the 75-period moving average (MA) is acting as a support level, and the price has rebounded; on the daily chart, the uptrend that began late last month continues along the 10-period MA. The pair is holding near its year-to-date high.

Today’s schedule includes Japan’s machinery orders at 8:50, Australia’s employment report at 10:30, Switzerland’s trade balance at 15:00, remarks by ECB President Lagarde at 16:00, the EU’s current account balance at 17:00,6:00 p.m. for the EU construction output, 8:00 p.m. for the UK BOE policy rate and statement, and the release of the UK BOE meeting minutes,at 9:30 PM: U.S. Initial Jobless Claims and the Philadelphia Fed Business Outlook Index; at 10:00 PM: SARB South Africa Policy Rate and Statement; at 11:00 PM: U.S. Leading Economic Index; and at 7:45 AM the following day: NZ Trade Balance.We will be watching for further upside potential in the pound, which has been strengthening alongside the U.S. dollar in the wake of the FOMC meeting.