The GBP/USD pair experiences a rebound, recovering from a three-week low, as concerns about the US Federal Reserve's (Fed) policies and the potential indictment of Fed Chair Jerome Powell impact the US Dollar (USD). The pair finds support near a significant 200-day Simple Moving Average (SMA), bouncing back from a four-day losing streak. Spot prices currently hover around 1.3435, marking a 0.20% daily increase. Despite a global shift towards safety and reduced expectations for aggressive US monetary policy easing, the USD faces headwinds due to the Fed's independence concerns. The USD Index (DXY) slides from its December peak, with the US Nonfarm Payrolls (NFP) report showing a 50K job increase in December, falling short of market expectations and potentially indicating stagnant monetary policy in the first quarter. However, rising bets for two more interest rate cuts by the Bank of England (BoE) in 2026 may deter aggressive bullish positions on the British Pound (GBP) and the GBP/USD pair. Traders await this week's US inflation data, including the Consumer Price Index (CPI) and Producer Price Index (PPI), as well as the UK GDP report, for further guidance. The US Dollar's performance against major currencies is mixed, with the strongest showing against the Japanese Yen, as indicated by the percentage changes in the table.
