|
Forex Today: Fed hit the dollar, ECB and UK election coming next
Here is what you need to know Wednesday, December 11th:
- The US Federal Reserve sent the dollar sharply lower across the FX board. Policymakers kept the fund rate on-hold as expected, but their concerns about inflation and global developments weighed on sentiment. Dot-plot shows no rate hikes next year, keeps inflation and GDP forecasts unchanged.
- The market seems to have overreacted to Fed’s announcement, as it added nothing new to what the market already knew. The EUR/USD pair soared to the 1.1140 price zone anyway, triggering stops above its previous weekly high. ECB, with Christine Lagarde’s debut as Chief coming next.
- The GBP/USD pair trimmed its early losses and recovered the 1.3200 level, despite the latest YouGov polls indicates that Conservatives would get an advantage of 28 points, not enough for PM Johnson to pass its Brexit deal. The UK heads to the polls this Thursday.
- Uncertainty surrounding the US-China relationship persists. Speculative interest has begun pricing in a delay in a US-China trade deal, while fearing the next round of tariffs scheduled for December 15, will come into effect as planned. Despite both sides continue reaffirming they are close to an agreement, they are incapable to offer something material to work with.
- Commodity-linked currencies were the best performers, with AUD/USD nearing 0.6900, finding some support in Wall Street moving away from intraday lows.
- The market turned to safe-havens just ahead of the close, with the Japanese Yen modestly up, and yields marginally lower for the day. Gold edged higher but remains below $1,480 a troy ounce.
- Cryptocurrencies remained pressure, consolidating previous losses.
Author
FXStreet Team
FXStreet
More from FXStreet Team
