GBP/USD Treads Water Ahead of Fed and BoE rate Double-Header

• GBP/USD settled Monday flat near Friday's close, with the central bank double-header keeping price tied near 1.3540.
• The Fed is set to hold at 3.50% to 3.75% Wednesday in Powell's final meeting before his May 15 chair term ends.
• The BoE meets Thursday with all 62 economists in a Reuters poll seeing a hold at 3.75%, though hike risks have crept in.

GBP/USD ended Monday largely unchanged from Friday's closing bids close to 1.3535, with the pair drifting in a tight range through the European and US sessions. Price tagged a session high near 1.3575 in early dealing before fading back to the 1.3535 area, where small-bodied candles and overlapping bodies pointed to indecision. The pair is consolidating near the upper end of an April recovery that began from the 1.3160 area, with markets reluctant to commit ahead of this week's central bank double-header.

The Fed and the Bank of England (BoE) both deliver rate decisions this week, a back-to-back setup that effectively sets the tone for the pair through May. The Federal Open Market Committee (FOMC) is widely expected to hold the federal funds rate at 3.50% to 3.75% on Wednesday in Chair Jerome Powell's final meeting before his term expires May 15. April brings no Summary of Economic Projections, leaving the statement and press conference to do the work amid March headline inflation at a two-year high of 3.3% and Q4 2025 Gross Domestic Product (GDP) revised to just 0.5%. The Senate Banking Committee is also scheduled to vote on Kevin Warsh's nomination as Powell's successor on Wednesday, layering leadership-transition risk on top of the policy event. Thursday's advance Q1 GDP read (consensus 2.2%), Core Personal Consumption Expenditures (PCE) print (forecast 3.2% YoY), and Friday's ISM Manufacturing Purchasing Managers Index (PMI) round out a packed US data calendar.

On the Pound Sterling side, the BoE Monetary Policy Committee (MPC) meets Thursday with all 62 economists in a Reuters poll calling for a hold at 3.75% after March's unanimous vote to keep rates steady. The picture has shifted notably since the Iran conflict reignited inflation pressures, with markets now split between a hold and a hike rather than the two cuts priced before the war. Governor Andrew Bailey has cautioned that the world is facing "a very big energy shock" but signalled the BoE will not rush to act, while previous Bank staff projections pointed to UK Consumer Price Index (CPI) inflation drifting back toward the 2.0% target through Q2. The accompanying Monetary Policy Report, MPC vote split (consensus 8 hold, 1 hike), and Bailey's 11:30 GMT press conference Thursday will carry the message, with Chief Economist Huw Pill's Friday speech the week's closing UK catalyst against a still-fragile US-Iran ceasefire backdrop.

GBP/USD 15-minute chart