GBP/USD Slides as Hawkish Fed Chair Warsh Lifts Dollar

Sterling is on the back foot against the greenback after Fed Chair Kevin Warsh struck a notably hawkish tone, reinforcing expectations that US rates will stay restrictive for longer than markets had priced. The comments triggered an immediate bid across dollar pairs, with GBP/USD among the more visible movers as traders reassessed the rate differential outlook.

Warsh's remarks mark a departure from the 'quieter Fed' narrative many desks had assumed would dominate his tenure, adding a fresh layer of guidance that traders are now pricing into forward curves. For cable, this shifts near-term risk toward further downside as dollar strength broadens across G10 crosses.

With gold also sinking on the same headlines, the dollar's rally appears to be a cross-asset story rather than an isolated pound weakness, suggesting GBP/USD reaction will hinge on how durable the hawkish framing proves in coming sessions.