USD strength confirmed as Fed signals no September rate cut
Daily Currency Update
USD strength reaffirmed, as the main driver overnight was the outcome of the Federal Open Market Committee (FOMC) meeting. The Federal Bank kept interest rates unchanged, as expected, but the accompanying statements and Chair Jerome Powell's press conference were more hawkish than many had anticipated. Powell's comments and the FOMC's overall tone have pushed back against market expectations of a September rate cut, reaffirming the US Dollar's strength across the board.Both the British Pound and Euro have lost ground against the resurgent US Dollar. While the Eurozone's GDP data was a positive point yesterday, it was overshadowed by the Federal Reserve Bank's stance. The Pound is also trading with caution ahead of its own major central bank decision.
Australian Dollar weakness continues as the Australian Dollar is still under pressure following yesterday's disappointing inflation data, which has cemented expectations of a rate cut from the Reserve Bank of Australia (RBA).
Key Movers
Eurozone Inflation Data (Consumer Price Index) is seen as a key release for the Euro today, and it will be closely watched for any signs that inflation is easing or remaining stubbornly high. A lower-than-expected reading could put further pressure on the Euro.US Core Personal Consumption Expenditures Month on Month and Year on Year are due later today, it measures the change in price of goods and services purchased by consumers.
US Employment Cost Index and Personal Consumption Expenditures Index: These are important releases for the US and will provide further data points for the Federal Reserve Bank's ongoing assessment of the economy as they use it to measure the inflation in the country.
Expected Ranges
- GBP/USD: 1.3220 - 1.3290 ▼
- GBP/EUR: 1.1550 - 1.1590 ▲
- GBP/AUD: 2.0520 - 2.0580 ▲
- EUR/USD: 1.1440 - 1.1480 ▼