Attention Turns to the Pound’s Upside Potential as It Strengthens Alongside the U.S. Dollar Following the FOMC Meeting

Attention Turns to 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 strengthened as the Federal Open Market Committee (FOMC) cut the policy rate by 0.25%—the first rate cut in five meetings—as expected by the market, but the committee’s remarks dampened expectations for further substantial rate cuts.The euro-dollar 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,at 6:00 p.m., EU construction output; at 8:00 p.m., the Bank of England’s policy rate announcement and statement, along with the release of the BOE minutes;at 21:30, U.S. initial jobless claims and the Philadelphia Fed Business Outlook Index; at 22:00, the SARB’s policy rate decision and statement; at 23:00, the U.S. Leading Economic Index; and at 7:45 the following day, New Zealand’s trade balance.We will be watching for further upside potential in the pound, which has been firming alongside the U.S. dollar in the wake of the FOMC meeting.