GBP/USD surges to multi-year high above 1.2750 on Fed independence concerns

GBP/USD rocketed to a fresh multi-year peak of 1.2785, gaining 0.8% as concerns over Federal Reserve independence weakened the dollar while a Middle East ceasefire reduced safe-haven demand. Sterling's impressive rally marks its highest level since mid-2023, supported by doubts about the Fed's autonomy following recent political commentary suggesting potential interference in monetary policy decisions. The ceasefire agreement between regional powers has additionally reduced geopolitical risk premiums, encouraging risk-on flows that favor high-yielding currencies like the pound. Technical indicators show GBP/USD has broken above key resistance at 1.2750, opening the path toward 1.2800-1.2850 zone. The DAX index also benefited from improved risk sentiment, climbing 1.2% to 18,450. Traders are closely watching UK inflation data due Friday, which could further support sterling if it exceeds the 2.3% forecast, potentially delaying Bank of England rate cuts.