GBP/USD falls to 1.3550 as BoE holds rates, trims QT

• GBP/USD retreats after BoE 7-2 vote leaves rates unchanged, trims QT program to £70B.
• UK inflation nearly double target; Bailey signals more cuts ahead, though timing remains uncertain.
• US Jobless Claims ease to 231K, while Powell cites immigration as labor headwinds.

The British Pound reversed its course, drops over 0.51% following the Bank of England's decision to hold rates unchanged, after the Fed began its 2025 easing cycle. The GBP/USD trades at 1.3551 after hitting a daily high of 1.3660.

Pound slides after BoE keeps Bank Rate at 4% and scales back QT, diverging from Fed's easing cycle

The economic schedule on both sides of the Atlantic has been busy. Initial Jobless Claims for the week ending September 13 came at 231K, below forecasts of 240K and the previous week upward revised 264K. Continuing Claims dipped from 1.939 million to 1.92 million

Although the data was positive, hiring has slowed as most economists blamed tariffs. The Fed Chair Jerome Powell mentioned that the lack of immigration is another reason weighing on the labor market.

Earlier, the Bank of England maintained the Bank Rate at 4% as expected, on a 7-2 vote split and reduced the Quantitative Tightening (QT) from £100 billion to £70 billion. Worth noting, in the previous meeting the BoE reduced rates even though inflation in the UK is almost twice the bank's 2% target.

BoE Governor Andrew Bailey said that there will be more rate cuts, though added that the timing and scale is uncertain.

Ahead, the UK economic docket will feature Retail Sales data. In the US, the calendar is empty, though traders should be aware that the Fed blackout period ended and that some officials could cross the newswires.

GBP/USD Price Forecast: Mild-bearish as evening star emerges

The GBP/USD shifted from being upward biased, to consolidate within the 1.3500 - 1.3650 area as an "evening star" emerges. If bears would like to push the exchange rate lower, they must clear the 20-day SMA at 1.3521, followed by the September 11 swing low of 1.3491. Once cleared, the next area of interest would be the confluence of the 100 and 50-day SMAs at around 1.3475/62.

On the flip side, a GBP/USD daily close above 1.3600, could cement the case for another attempt to challenge the yearly peak at 1.3788.