GBP/USD: Greenback weakens and BoE rate cut bets decline

• GBP/USD climbed above key technical levels on Thursday.
• Cable momentum is heading higher as the Greenback weakens.
• Trump pick for Fed board seat brings tariff-happy policymaker to key rate-setting table.

GBP/USD extended recent bullish momentum on Thursday, gaining over two-thirds of one percent on the day and climbing above key technical indicators as market rebalance both a weaker US Dollar (USD) and a stronger Pound Sterling (GBP). A new Federal Reserve (Fed) Board of Governors member selected by Donald Trump is bringing protectionist policy home to the Fed, and a rate cut barely squeezed through the Bank of England's (BoE) Monetary Policy Committee (MPC), trimming expectations of follow-up rate cuts.

United States (US) President Donald Trump has selected Stephen Miran, the current Chair of the US Council of Economic Advisors, to replace recently resigned Federal Reserve (Fed) Board of Governors (BoG) member Adriana Kugler. Miran is a pro-protectionist who championed including trade deficits in tariff calculations and will likely be friendly to President Trump's rate cut expectations. Adding on that Trump is expected to favor Fed Board member Christopher Waller for the Fed Chair position when Jerome Powell's term ends in 2026, and the pool of Fed voters who will support arbitrarily dropping interest rates regardless of the state of the US economy will grow substantially.

Odds of a repeat rate cut from the BoE decline after a close vote

The BoE trimmed interest rates by a quarter-point on Thursday, as markets had broadly expected. What sent Cable traders for a loop was the vote count on the MPC: BoE policymakers voted five-to-four for a 25 bps interest rate cut, a much slimmer margin than the expected seven-to-two. With MPC votes running so close to even, market expectations of a follow-up interest rate cut have withered appreciably, putting a rate hold at the BoE's next interest rate decision in the crosshairs.

GBP/USD technical outlook

Thursday's bullish momentum carried GBP/USD back over the 50-day Exponential Moving Average (EMA) near 1.3425, carrying Cable bids above 1.3450 and chalking in a third consecutive day of accelerating Pound gains. GBP/USD has closed higher or flat for five straight sessions, and heads into the Friday market window looking for a sixth.

GBP/USD daily chart