British Pound weakens to near 1.3300 ahead of UK budget, Fed rate decision

The British pound has slipped toward the 1.3300 level against the US dollar ahead of the upcoming UK budget announcement and the Federal Reserve's rate decision. The move reflects a transmission through relative policy expectations, where the sterling weakness is being driven by uncertainty over the fiscal outlook and the anticipated path of Fed rates relative to the Bank of England. A budget event raises the risk of revised borrowing forecasts and gilt supply, which can pressure sterling when investors demand a higher risk premium on UK assets, while a Fed decision shapes the dollar's yield advantage and broader global risk appetite. GBP/USD and UK gilts are the most directly exposed, with the cross sensitive to any surprise in fiscal targets and the dollar sensitive to the tone of the Fed's forward guidance. Traders will watch the Fed's post-decision press conference and any revisions to the dot plot, as shifts in the expected pace of easing would likely determine whether the pound's recent weakness extends or reverses.

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