- Softer UK consumer inflation figures exerted some intraday pressure on the Sterling.
- Reluctance to place aggressive bets ahead of FOMC helped limit the downside.
The GBP/USD pair held on to its weaker tone through the early North-American session on Wednesday, albeit has managed to recover few pips from daily lows.
With investors looking past the latest Brexit optimism, the pair continued with its struggle to find acceptance above the key 1.2500 psychological mark and retreated from multi-week tops amid a modest pickup in the US Dollar demand. The intraday slide accelerated further following the release of softer-than-expected UK consumer inflation figures, though lacked any strong follow-through selling.
Downside remains limited ahead of FOMC
A sharp intraday fall in the US Treasury bond yields kept a lid on any runaway rally for the greenback and helped limit any deeper losses for the major. Moreover, investors also seemed reluctant to place any aggressive bets, rather preferred to wait on the sidelines ahead of the highly anticipated FOMC monetary policy decision, scheduled to be announced later during the US trading session.
The Fed is widely expected to cut interest rates by another 25 bps, though opinions over further/aggressive easing remained divided. Hence, investors will closely scrutinize the accompanying monetary policy statement and updated economic projections. This coupled with the Fed Chair Jerome Powell's comments during the post-meeting press conference should produce some meaningful trading opportunities.
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
EUR/USD stays in tight channel above 1.0750
EUR/USD continues to fluctuate in a narrow band slightly above 1.0750 after posting small gains on Monday. Disappointing Factory Orders data from Germany limits the Euro's gains as investors keep a close eye on comments from central bankers.
GBP/USD retreats below 1.2550 as USD recovers
GBP/USD stays under modest bearish pressure and trades below 1.2550 in the European session on Tuesday. The cautious market stance helps the USD hold its ground and doesn't allow the pair to regain its traction. The Bank of England will announce policy decisions on Thursday.
Gold declines below $2,320 amid renewed US Dollar demand
Gold trades in negative territory below $2,320 as the souring mood allows the USD to find demand on Tuesday. Nevertheless, the benchmark 10-year US Treasury bond yield stays below 4.5% and helps XAU/USD limit its losses.
Ripple lawsuit develops with SEC reply under seal, XRP holders await public redacted versions
Ripple lawsuit’s latest development is SEC filing, under seal. The regulator has filed its reply brief and supporting exhibits and the documents will be made public on Wednesday, May 8.
The impact of economic indicators and global dynamics on the US Dollar
Recent labor market data suggest a cooling economy. The disappointing job creation and rising unemployment hint at a slackening demand for labor, which, coupled with subdued wage growth, could signal a slower economic trajectory.