Sterling stabilized around $1.33 following last week’s rally, remaining close to a six-week peak of $1.339 hit on Thursday, as investors paused to assess policy outlooks from both the Bank of England and the Federal Reserve. The pound’s gains last week were supported by relief that Finance Minister Reeves’ budget was better received than feared, along with an upward revision to November’s UK Services PMI. Looking ahead, expectations for next week’s BoE rate decision have changed little, with roughly an 84% chance of a cut priced in despite signs of accelerating wage growth. Markets are now nearly fully pricing a second 25-basis-point cut by June, with about a 75% probability of it occurring in April. In the US, the Federal Reserve is expected to deliver a 25-basis-point cut on Wednesday, though focus will remain on updated FOMC projections amid lingering uncertainty over the 2026 policy path.