- GBP/USD came under renewed selling pressure on Wednesday despite a subdued USD demand.
- Investors now await the FOMC decision for some impetus ahead of the BoE meeting on Thursday.
The GBP/USD pair remained depressed heading into the North American session and dropped to fresh one-month lows, around the 1.3625 region in the last hour.
Following an early uptick to the 1.3675-80 region, the GBP/USD pair met with some fresh supply on Wednesday and so far, has failed to benefit from a subdued US dollar price action. The risk-on impulse – as depicted by a fresh leg up in the equity markets – acted as a headwind for the safe-haven greenback.
China's struggling property giant Evergrande Group said it would pay the bond interest due on Thursday and the Chinese central bank injected cash into the banking system. The developments eased fears of an immediate corporate collapse and boosted the global risk sentiment, which, in turn, undermined safe-haven assets.
However, expectations for an imminent Fed taper announcement helped limit losses for the greenback. Conversely, the British pound was weighed down by some cross-driven weakness stemming from an uptick in the EUR/GBP cross. Apart from this, some repositioning trade ahead of the key event risk exerted pressure on the GBP/USD pair.
The market focus remains glued to the outcome of a two-day FOMC monetary policy meeting. The Fed will announce its decision later during the US session and investors will look for fresh clues about the likely timing of the tapering move. This will influence the USD price dynamics and provide some impetus to the GBP/USD pair.
Apart from this, the Bank of England meeting on Thursday will be looked upon to determine the next leg of a directional move. Nevertheless, the GBP/USD pair has now moved within the striking distance of the 1.3600 mark. This is closely followed by YTD lows, around the 1.3570 region, which should act as a key pivotal point for traders.
Technical levels to watch
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
USD/JPY holds positive ground around 151.50 following Japanese CPI data
The USD/JPY pair holds positive ground for the second consecutive day near 151.45 on Friday during the early Asian trading hours. The cautious approach from the Bank of Japan to keep monetary conditions accommodative exerts some selling pressure on the Japanese Yen.
AUD/USD depreciates on risk aversion amid a stronger US Dollar
AUD/USD extends its losses for the second successive session on Friday. However, market activity is expected to be subdued due to light trading on Good Friday. Meanwhile, the US Dollar strengthens as recent data indicates annualized economic expansion in the United States, driven by consumer spending.
Gold price finishes Thursday’s session set to reach new all-time highs
Gold price rallied during the North American session on Thursday and hit a new all-time high of $2,225 in the mid-North American session. Precious metal prices are trending higher even though US Treasury yields are advancing, underpinning the Greenback.
Top 3 Price Prediction BTC, ETH, XRP: Retail watches from the sidelines with a bias for shorts
Bitcoin is showing strength as markets head into the Easter holidays. As it rises, altcoins are following suit, with Ethereum and Ripple posting almost similar gains. Meanwhile, there remains an unfilled CME Gap, with a lot of liquidity also resting above and below BTC price.
Bears have been standing before a steamroller so far this year
Despite a pushback on rate cuts from Christopher Waller, and what was supposed to be cautious trading sentiment ahead of critical US inflation data released later on Friday, the S&P 500 rose on Thursday, marking its best first-quarter performance in five years.