US dollar enjoys small gains ahead of Fed meeting
Daily Currency UpdateThe US dollar index was up again as investors awaited statements from the Federal Reserve. Analysts don’t expect the Fed to make any monetary policy changes, and they will be paying close attention to even the slightest shift in tone in today’s press conference that could point to any signs of an end to monetary easing.
The US dollar also enjoyed small gains against the yen yesterday following the Bank of Japan’s policy announcement. The BoJ opted to maintain the current policy setting and further downgraded its inflation forecast.
President Joe Biden is set to unveil a $1.8 trillion stimulus plan to Congress today. The plan, which will provide more funding for childcare and education, will also include a capital gains tax hike for Americans with annual incomes of more than $1 million.
Key MoversUK prime minister Boris Johnson's political troubles dominated proceedings around the pound yesterday. Johnson did no favours for the pound with his “let the bodies pile high” comment and some are predicting this latest scandal will hinder the government's efforts to push the UK economy further despite the solid vaccination campaign so far. On the whole though the pound has been relatively insensitive to the political noise within the UK.The pound is taking most of its direction this week from other currencies, and the Federal Reserve's meeting today could result in GBPUSD making a renewed drive for the 1.40 psychological level.
Having touched intraday highs at 0.7805 early in the domestic session, the Australian dollar tracked steadily lower throughout Tuesday marking lows at 0.7760 despite a surge in key commodity prices.
- EUR/USD: 1.205 - 1.209 ▲
- GBP/USD: 1.386 - 1.392 ▲
- AUD/USD: 0.773 - 0.777 ▲
- USD/CAD: 1.238 - 1.241 ▼