US Dollar Struggling Ahead of Fed Announcement

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Pound Sterling

Although Sterling softened against the Euro yesterday its bullish relationship with the US Dollar continued, and the Pound remains trading close to an eight-month high against its North American rival. Today’s Bank of England minutes will be the main cause of Pound movement during the European session.

GBP/EUR is trading in the region of 1.1921 and GBP/USD is trading in the region of 1.5922

US Dollar

The pressure of the Federal Open Market Committee’s two-day policy meeting, which concludes at 19:00 GMT, left the ‘Greenback’ trading in the region of a three-week low against the Euro. The US Dollar also hit a multi-month low against the Pound as investors weigh the odds of the Fed tapering stimulus.

USD/GBP is trading in the region of 0.6283 and USD/EUR is trading in the region of 0.7487

Euro

Overnight the Euro retained gains recorded against the Pound in the wake of yesterday’s encouraging ZEW economic sentiment survey for Germany. Although Eurozone construction output figures are due for release today EUR/GBP fluctuations will primarily be driven by the BoE minutes while US news will be the biggest influence on the EUR/USD pairing.

EUR/GBP is trading in the region of 0.8394 and EUR/USD is trading in the region of 1.3354

Australian Dollar

Although 0.3 and 0.6 per cent respective gains in the Conference Board and Westpac leading indexes for Australia lent the ‘Aussie’ support during the Australasian session, the currency did soften against the US Dollar ahead of today’s big Fed announcement.

AUD/GBP is trading in the region of 0.5879, AUD/EUR is trading in the region of 0.7006 and AUD/USD is trading in the region of 0.9356

New Zealand Dollar

While New Zealand’s current account deficit was shown to be narrower than forecast, after the nation’s Finance Minister asserted that a weaker ‘Kiwi’ would provide an economic boost the New Zealand Dollar broadly declined. While the conclusion of the FOMC’s two-day policy meeting will provoke significant market volatility, investors will also be looking to New Zealand’s GDP data, due out at 23:45 GMT.

NZD/GBP is trading in the region of 0.5171, NZD/EUR is trading in the region of 0.6150 and NZD/USD is trading in the region of 0.8230

Canadian Dollar

On Monday the ‘Loonie’ was supported against its peers and hit a month-high against the US Dollar following the release of a surprisingly strong Canadian housing report. Yesterday the commodity-driven asset was able to consolidate gains as domestic factory orders surged to a five-month high. Ahead of this week’s Canadian inflation report, US news will be the main trigger for ‘Loonie’ movement.

CAD/GBP is trading in the region of 0.6104, CAD/EUR is trading in the region of 0.7272 and CAD/USD is trading in the region of 0.9713

These exchange rates were correct as of 09:10 am

Laura Barrett
This post was written by
Laura moved from the US to the UK several years ago. As a corporate sales executive for a leading foreign exchange company, Laura has expert knowledge of currency movements and market trends and is able to offer specialist guidance regarding making a trade at the most lucrative time and protecting transactions from currency risk.