Cable was able to hit fresh daily highs above 1.3900 as the Dollar weakened ahead of yesterdays Fed Interest Rate Decision. While Sterling was able to capitalize on the Greenback’s nervousness, the Electoral Commission opened an investigation into the financing of the refurbishment of Prime Minster Boris Johnson’s residence, “on suspicions an offence may have been committed” – causing the Pound to drop modestly as more political scandal is uncovered.
The Federal Reserve upgraded its view of the US economic recovery but kept interest rates close to zero and showed no signs of moving to withdraw support for the economy. At the end of the 2-day meeting, Fed officials praised the improvement in the labour market and offered a brighter picture than they had in March. The Fed went on to note that the future of the economy depends “significantly on the course of the virus”. While Powell’s outlook has become increasingly more positive, the USD took a tumble after the meeting. GBPUSD went above 1.3950 and EURUSD comfortably surpassed the 1.21 handle.
After starting the day below the 1.39 mark, GBPUSD was able to close at 1.3908 after opening the session at 1.3880. It is important to note that these subtle upside gains were not due to strength in Sterling, but rather weakness on behalf of the Dollar.
GBPEUR also made gains on Wednesday, reclaiming its position above 1.15 at the close. The pair opened the day at 1.1499 and closed at 1.1504.
EURUSD traded hesitantly on Wednesday as investors awaited the latest news from the Fed. The pair opened at 1.2071 and finished the day at 1.2089.
On the data front, at 08:55, German Unemployment Change and Unemployment rate will be released. Then at 10:00 the Eurozone will be giving their Consumer Confidence figure for April, followed by the latest Economic and Industrial Sentiments. In the afternoon from the US, GDP Growth Rate is expected to come in at 6.1%, with a previous of 4.3%. Followed by the Weekly Labour report, and speeches from Fed members Quarles and Williams.