The British pound surged past $1.33, hovering at its strongest level since October 22, supported by broad dollar weakness and diminished expectations for further Bank of England easing in 2026. The US Federal Reserve delivered the anticipated rate cut while signaling a likely pause in January as policymakers await additional data to assess the economic outlook. Expectations for next week’s BoE decision remain largely unchanged, with roughly an 84% chance of a rate cut priced in, despite signs of accelerating wage growth and persistent inflationary pressures. Markets are now almost fully pricing in a second 25-basis-point cut by June, with about a 75% probability of it occurring in April. Investors now await key UK monthly GDP data due on Friday, which could further influence market expectations.