Sterling Loses Momentum Ahead of Fed

Barbara Zigah

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%.

Barbara Zigah

After working on Wall Street, Barb began her second career as a freelance writer at Daily Forex, where the CEO recognized fresh, untapped potential and was willing to give her a try. She’s never looked back. Since then, she’s worked steadily as a freelance writer and editor in the financial services and Forex-related industry.

Did you like what you read? Let us know what you think!

exclamation mark

Please make sure your comments are appropriate and that they do not promote services or products, political parties, campaign material or ballot propositions. Comments that contain abusive, vulgar, offensive, threatening or harassing language, or personal attacks of any kind will be deleted. Comments including inappropriate will also be removed.

0 User comments

exclamation mark

Please make sure your comments are appropriate and that they do not promote services or products, political parties, campaign material or ballot propositions. Comments that contain abusive, vulgar, offensive, threatening or harassing language, or personal attacks of any kind will be deleted. Comments including inappropriate will also be removed.

Read more
Add new comment
This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.