The US Dollar was broadly lower during London trade on Wednesday on growing expectations that the Federal Reserve might need to embark on more easing weighed on the currency. The monetary policy decision is due out later today; while analysts believe the Fed is likely to leave interest rates at their current low level, the focus will be on the accompanying statement. Markets are anxious to hear if the Fed's projections for the US economy have been downgraded, and especially its view on inflation. Then, analysts will have a clearer insight into what the Fed's next possible moves might be. Some analysts believe that the Fed will simply continue to monitor the situation carefully, and adjust policy as the situation demands. That could mean that there may not be any sort of policy shift ahead of the US Presidential election on November 3rd.
As of 11:22 am in London, the EUR/USD was trading higher at $1.1876, up 0.2592%; the pair has ranged from a low of $1.18284 to a high of $1.18830 in today's session. The GBP/USD was higher at $1.2950, up 0.4686%, and off the session peak of $1.29509. The USD/JPY was trading lower at 105.1380 Yen, down 0.24%, and off the session trough of 105.133 Yen.
Hope for China Lifts Aussie and Kiwi Dollars
In China, data that was far better than analysts had expected is raising hopes that the world's second-largest economy could be rebounding from the impact of the Coronavirus. Earlier this week, retail sales and industrial production figures gave investors some hope of recovery. That news has helped to push the Chinese Yuan higher, as well as those currencies from nations that rely on China's growth, namely the Aussie and Kiwi Dollars. The AUD/USD was higher at $0.7336, a gain of 0.5111%, while the NZD/USD was at $0.6749, up 0.5843%.