Markets rest before Fed announcement
Wednesday 16 September, 2020
Daily Currency UpdateGBP - British PoundThis morning UK inflation for the month of August fell by less than expected when consumer prices rose by 0.2%, this was compared to an expected increase of 0.1% and 1% for the month of July.Sterling consolidated against the euro and the US dollar yesterday, both trading within very tight ranges as all eyes now turn to the Bank of England and the Federal Reserve. To add further pressure on the UK government, Britain’s testing system for Covid-19 was apparently creaking yesterday as a bottleneck stopped people from getting a test, according to the government it could take a matter of weeks to deal with.
Key MoversIt’s a big day for the USD with the US Federal Reserve announcements tonight at 7pm UK time. While they are broadly expected to keep interest rates low for the next several years, the Federal Reserve still has lots to decide upon as it guides the US economy through the Covid-19 pandemic.The main focus for the foreign currency markets will be the Federal Reserve’s updated forecast. Today they will provide their quarterly update on where they see GDP, unemployment and inflation heading. They will also provide an understanding of what improvements they would need to see from the US economy in order to increase interest rates in the future.We also have the release of US retail sales at 1.30 pm today.
- GBP/USD: 1.2810 - 1.2920 ▲
- GBP/EUR: 1.0810 - 1.0920 ▲
- EUR/USD: 1.1820 - 1.1950 ▲