GBPUSD investors focus on US Federal Open Market Committee minutes

Daily Currency Update

The US Dollar weakened yesterday, struggling against major rival currencies and the US Dollar index presented its lowest daily close in two weeks. With benchmark 10-year Treasury bond yields edging lower after the long weekend in the US, weighing on the US Dollar.

Markets focus on the Federal Open Market Committee minutes with the US Dollar may be on the back foot however it has gained some strength leading into the publication. Federal Reserve policymakers will be delivering speeches later today during the meeting to provide some guidance on future interest rates.

The CME Group FedWtach Tool suggests that markets anticipate interest rate cuts to begin in June whereas the odds for a 25-basis points rate cut in March have decreased.

Yesterday the Bank of England policymakers testified on inflation and the outlook of the economy before Parliament's Treasury Committee.

Bailey explained that inflation does not need to fall back to 2% before rate cuts materialize. The Pound struggles to hold on to the gains in today’s European session and the weekly highs but remains slightly positive.