The British pound couldn't maintain momentum against its US rival and lost ground during London trade on Wednesday as Forex traders await the latest news from the US Federal Reserve Bank. Currency strategists suggest that dollar strength will be fleeting, as the Fed isn't likely to shift its monetary policy from the current dovish position. Analysts recently polled say that the Fed will likely maintain the status quo on both interest rates and its asset purchase program until there is clear evidence that the US economy is recovering at a sustainable pace. Recent economic data showed that durable goods orders for March failed to meet analysts' forecasts, and by a significant margin.
In London trading as of 11:18 am, the GBP/USD was trading at $1.3883, a loss of 0.1302%, with the pair trading in a daily range of $1.38621 at the low end and $1.39158 at the high end. The EUR/GBP was lower at 0.8691 pence, down 0.069%, off the session trough of 0.86839 pence while the high was recorded at 0.87081 pence.
Consumers' Uncertainty Clear in German Survey
In addition to the Fed's policy decision, markets will also be waiting to hear what the head of the European Central Bank has in mind. Christine Lagarde is due to speak later today, and Forex players will want to know how the ECB views the Eurozone's economic outlook, especially given the repercussions of the coronavirus on the Eurozone industry. In Germany, earlier today, the GfK consumer confidence survey revealed that German consumers seem to have little faith in the economic outlook of the largest economy in the EU. The reading for May came in at -8.8, far worse than the -3.5 that analysts had predicted, and off the previous reading of -6.1. That suggests that German consumers are likely to be less enthusiastic about unnecessary purchases. The EUR/USD is trading at $1.2077, down 0.1332%.