GBP/USD dives after Fed's hawkish pause

GBP/USD declined towards 1.2330 after the release of the Fed's statement
The Fed held rates steady at 5.25% -5.50% as expected.
The dot plot projections were kept at 5.6%.

Patricio Martín FXStreet

Following the Federal Reserve (Fed) decision, the GBP/USD fell to a low of around 1.2330 and then recovered to 1.2365. The USD measured by the DXY index recovered back above 105.00, while the US Treasury yields are reversing their course, clearing daily declines with the 2,5 and 10-year rates standing at 5.14% (high since 2006), 4.54% (high since 2007) and 4.35% respectively.

The policy statement revealed that the Fed decided to hold rates at the 5.25%-5.50% range. Regarding the famous dot plots, they showed that 12 members of the Federal Open Market Committee (FOMC) are still seeing one more 25 basis point hike as the median projections stood at 5.6%. In addition, on the economic forecast front, Unemployment and Core Personal Consumption Expenditures (PCE) inflation estimations were downgraded while the Gross Domestic Product (GDP) projections were revised to the upside. Moreover, the longer-run interest rate was revised from 2.8% to 3.3% and seems to be spooking investors and benefiting the USD. Overall, the Federal Reserve is aggressive on interest rates but optimistic about the US economy.

Focus now shifts to Chair Powell's presser.

GBP/USD Intra-day chart

Author

Patricio Martín

FXStreet

Patricio is an economist from Argentina passionate about global finance and understanding the daily movements of the markets.

EUR/USD flirts with daily highs, retargets 1.1900

EUR/USD regains upside traction, returning to the 1.1880 zone and refocusing its attention to the key 1.1900 barrier. The pair’s slight gains comes against the backdrop of a humble decline in the US Dollar as investors continue to assess the latest US CPI readings and the potential Fed’s rate path.

GBP/USD remains well bid around 1.3650

GBP/USD maintains its upside momentum in place, hovering around daily highs near 1.3650 and setting aside part of the recent three-day drop. Cable’s improved sentiment comes on the back of the Greenback’s irresolute price action, while recent hawkish comments from the BoE’s Pill also collaborate with the uptick.

Gold clings to gains just above $5,000/oz

Gold is reclaiming part of the ground lost on Wednesday’s marked decline, as bargain-hunters keep piling up and lifting prices past the key $5,000 per troy ounce. The precious metal’s move higher is also underpinned by the slight pullback in the US Dollar and declining US Treasury yields across the curve.

Crypto Today: Bitcoin, Ethereum, XRP in choppy price action, weighed down by falling institutional interest

Bitcoin's upside remains largely constrained amid weak technicals and declining institutional interest. Ethereum trades sideways above $1,900 support with the upside capped below $2,000 amid ETF outflows.

Week ahead – Data blitz, Fed Minutes and RBNZ decision in the spotlight

US GDP and PCE inflation are main highlights, plus the Fed minutes. UK and Japan have busy calendars too with focus on CPI. Flash PMIs for February will also be doing the rounds. RBNZ meets, is unlikely to follow RBA’s hawkish path.

Ripple Price Forecast: XRP potential bottom could be in sight

Ripple edges up above the intraday low of $1.35 at the time of writing on Friday amid mixed price actions across the crypto market. The remittance token failed to hold support at $1.40 the previous day, reflecting risk-off sentiment amid a decline in retail and institutional sentiment.