Pound Weakens as Fed Hawkish Outlook Fuels Dollar Surge

The British pound slipped to 1.2650 against the dollar on Thursday after U.S. initial jobless claims data showed 213,000 claims, below the 220,000 forecast, reinforcing a hawkish stance from the Federal Reserve. The U.S. dollar index rose 0.2% to 104.50, while the pound fell from 1.2700 earlier in the session. CME FedWatch now shows a 70% probability of a September rate cut, down from 75% a week earlier.

The stronger dollar and the continued Fed‑tightening outlook weigh on risk assets, including crypto, USD‑denominated token prices, DeFi yields and the risk appetite of both centralized and decentralized exchanges. A weaker pound could lift U.K. exports but also raise import costs, adding inflationary pressure and keeping the Bank of England’s policy stance uncertain.