The GBP/USD pair trades defensively near 1.2510 during the Asian session on Thursday, under pressure from a broadly stronger US Dollar (USD). The Greenback gains support from expectations that the Federal Reserve will adopt a slower pace of monetary easing this year, limiting the upside for the Pound Sterling (GBP).
In its December meeting, the Fed reduced the Federal Funds Rate to a range of 4.25%-4.5%, slightly below the previous target of 4.5%-4.75%. Fed Chair Jerome Powell highlighted the importance of caution in further rate cuts, citing persistently high inflation. Powell noted that central bank officials foresee a higher inflation outlook and expect only two rate cuts in 2025, a reduction from the four projected in September.
GBPUSD H1 chart is showing decreasing selling pressure, supporting the uptrend, along with the forecasted weakening of the USD.