GBP/USD is trading weak on Wednesday despite the cautious mood among investors towards the US dollar ahead of today’s FOMC meeting, possibly because optimism surrounding the UK economy has already been priced in. At the time of writing, GBP/USD is trading at around 1.388.

Analysts anticipate that the recent political criticisms in the British media have failed to make a dent in the GBP’s moves, continuing to enjoy support from the recent reopening of the UK economy. This has helped GBP/USD trade somewhat bullish over the past few sessions and also drive the Sterling to strengthen against the Euro.

Despite the optimism about UK’s economic rebound lending it support, the Sterling has been mostly moving within a range against its major peers, the dollar and the euro, as traders adopted a ‘wait and watch’ approach towards the UK economy’s reopening. However, it appears that the effects of the positive developments following the easing of lockdowns have been adequately priced in by investors, dipping the GBP’s appeal in markets for now.

Later today, GBP/USD could see some movement following the release of the latest FOMC decision. In case the Fed decided to extend its dovish outlook, it could turn the USD more bearish and possibly help this currency pair test the key $1.40 level.