The US Dollar dipped in early Asian trade, coming under pressure from the partial rebound of the Pound Sterling after the previous session’s dramatic losses. The GBP/USD had fallen to a low of $1.2086 yesterday and moved nearer to the 31-year trough of $1.1450 which was struck last Friday. The uncertainty over Britain’s departure from the European Union is continues to weigh on the Pound, especially now with the prospect of several major foreign banks considering abandoning London as a key financial center. The Pound got its latest boost from news that the UK Parliament will be voting on Prime Minister May’s plan for a smooth Brexit transition. Currency strategists don’t, however, believe that this reprieve for the Pound will be long-lasting.
As reported at 9:44 am (JST) in Tokyo, the GBP/USD was trading at $1.2285, up 1.48%; the pair’s range is currently $1.2102 at the low end and $1.2289 at the high end. The EUR/GBP was trading lower at 0.8998 Pence, down 1.43%.
Markets Await Fed Minutes and Retail Sales
In the US, markets will be anxiously awaiting the release later today of the September minutes from the Federal Reserve’s Open Market Committee. That could provide FX traders with more clues as to the timing of the next rate hike. Janet Yellen, the Fed Chair, as well as other key policymakers at the Fed, have repeatedly said that they are also looking for confirmation via economic data that a rate hike would be appropriate. The next key data will be US retail sales which comes out on Friday; the US consumer is the key driver of the American economy and an upbeat surprise could lift the Dollar as well as expectations of an impending rate rise.