GBP/USD jumps to 1.3380 as the Treasury yields drop after Fed rate hike

• Fed hiked rates by 25 basis points as expected.
• The USD is being offered as Treasury yields declined.

The GBP/USD pair jumped to a session high of 1.3380 after the Fed announced a 25 basis point rate hike as expected.

The interest dot plot remains largely unchanged as well. The Fed sees three rate hikes next year and two more in 2019. This was largely expected, hence the treasury yields fell after the rate hike announcement.

As of writing, the 10-year yield is trading at 2.368 percent vs. pre-Fed level of 2.4 percent. Also, the 2-year yield is down more than two basis points to 1.807 percent.

Meanwhile, the GBP/USD is trading around 1.3370 levels. Further gains may be hard to come as the Fed sees higher growth and lower jobless rate in 2018. It has revised the 2018 GDP forecast to 2.5 percent from the previous forecast of 2.1 percent.

GBP/USD Technical Levels

A move above 1.34 (zero levels) would open doors for 1.3431 (Dec. 11 high) and 1.3448 (Nov. 29 high). On the downside, breach of support at 1.3355 (Dec. 8 low) could yield a sell-off to 1.3311 (session low) and 1.33 (zero levels).