• GBP/USD has a fresh 30-month high in the bag after Fed rate cut.
• BoE rate call is in the barrel for Thursday, but no moves are expected.
• UK Retail Sales set to wrap up the week on Friday.

GBP/USD hit a fresh 30-month high on Wednesday, pushed within inches of the 1.3300 handle after the US Federal Reserve (Fed) trimmed interest rates by a jumbo 50 bps and chalking in the US central bank’s first rate cut in over four years. The UK’s Bank of England (BoE) is set to deliver its own September rate call early Thursday, but no moves are expected from the BoE after already cutting reference rates earlier this summer.

The BoE is expected to hold interest rates steady at 5.0% in a seven-to-two vote. The BoE’s Monetary Policy Committee (MPC) previously voted five-to-four to reduce interest rates by 25 bps from 5.25%, and markets are expecting the BoE to hold steady for this meeting.

The Fed's dot plot of the Federal Open Market Committee's (FOMC) Summary of Economic Projections was also revised downward from the central bank's previous rate outlook. The median policy expectations from the Fed now see the Fed Funds rate at 4.4% by year-end 2024 and 3.4% by year-end 2025, down from 5.1% and 4.1%, respectively.

Going deeper into the Fed's notes, Fed policymakers now see US Gross Domestic Product (GDP) growth of 2.0% flat through 2024, down from the previous print of 2.1% in June. Fed officials also expected the US Unemployment Rate to settle around 4.4% by the end of 2024.