The British Pound suffered minor losses on Tuesday against both the Euro and Dollar as market sentiment became more risk-off. The “global bond selloff continued yesterday” and the yield on the benchmark 10-year US Treasury bond climbed to 3% on the day - its strongest level since late-2018. Today however, after posting its highest daily close in nearly 2 years at 101.00, the US Dollar Index (DXY) “turned south during the Asian trading hours on Wednesday”.
The Dollar is likely to be disheartened by Atlanta Federal Reserve President Raphael Bostic’s comments yesterday as he “expressed a concern about the impact that rate hikes could have on the US economic recovery, saying the central bank shouldn’t move so fast that it chokes off growth”. Speaking with CNBC, Bostic did “not commit… to what pace the Fed should take in increasing benchmark rates. Instead, he said policymakers should be measured in their approach and watch how what they do impacts conditions”. Bostic noted that while he thinks he’s “in the same areas as my colleagues philosophically… I think it’s really important that we get to neutral and do that in an expeditious way”. Chicago Federal Reserve Bank President Charles Evans said Tuesday that he is "comfortable" with a round of rate hikes this year that includes two 50 basis-point increases and reaches a neutral setting by year end, but he does not see the need for bigger hikes. Evans claimed that the Fed “should be looking for clear progress of easing inflationary pressures or else we would need to be much more concerned about how much we will have to do”. Looking ahead, Evans was unable to give much information, noting that he will likely not “be able to make a judgment about that until the end of this year and probably into next year”.
GBPUSD opened on Tuesday at 1.3008 and had recorded a discrete loss by the end of the session, finishing at 1.3001.
GBPEUR also finished in the red yesterday. The pair opened at 1.2056 and closed at 1.2045.
EURUSD opened Tuesday at 1.0790 and closed at 1.0793
