The GBP/USD currency pair settled below recent high of 1.3726, its strongest level since July 2nd, in the wake of the Federal Reserve’s and the Bank of England’s policy decisions.

The Fed lowered its federal funds rate target range by 25 basis points to 4.00%-4.25% at its September meeting and indicated another 50 basis points of rate cuts by the end of the year.

Fed Chair Jerome Powell described the September policy action as a risk-management cut addressing the weakening labor market. Powell also noted the central bank was in a “meeting-by-meeting situation” in regard to the rate outlook.

Markets are now pricing in about a 92% chance of another 25 basis point Fed rate cut in October.

Meanwhile, the Bank of England left its benchmark interest rate without change at 4% at its September 18th meeting.

Two policy makers voted in favor of a 25 basis point rate cut, while seven voted for leaving rates on hold.

The central bank cited progress in disinflation after past shocks, underpinned by restrictive policy.

Yet, inflation, at 3.8% in August, has remained above target and is projected to rise slightly in September before easing back toward 2%.

Wage growth, while still elevated, has slowed and is expected to ease further.

BoE policy makers also highlighted a gradual, data-driven approach with no pre-set trajectory for rate cuts.

The major Forex pair lost 0.71% for the week.