STORY LINK Pound US Dollar Exchange Rate Steady despite Cautious Market Mood
The Pound US Dollar exchange trod water on Wednesday amid a lack of domestic data releases and despite a return to risk-off trading conditions.
At the time of writing, GBP/USD was trading at approximately $1.3094, virtually unchanged from the start of Wednesday’s session.
The US Dollar (USD) attracted some investor attention on Wednesday despite the lack of economic data releases. The currency’s rise was driven by an anxious market sentiment, which boosted the safe-haven currency’s appeal.
However, investors were cautious about making aggressive moves on the USD on Wednesday as they awaited the Federal Reserve’s latest meeting minutes from its latest meeting in September.
The minutes, set to be released on Wednesday evening, will be scrutinized to determine if the Fed’s recent 50 basis point interest rate cut was a singular event, or if another could be forthcoming.
If the minutes suggest a more measured approach to easing monetary policy in the near future, the USD could strengthen. Conversely, if the central bank hints at another significant rate cut this year, the ‘Greenback’ could tumble as a result.
The Pound (GBP) was largely unchanged against most other currencies on Wednesday amid a lack of significant economic catalysts.
Sterling managed to maintain its ground against safe-haven currencies on Wednesday despite markets opting for safer assets.
Typically, the Pound is vulnerable to market downturns due to its risk-sensitive nature, but it managed to stay afloat against the majority of its counterparts nevertheless.
Looking forward, the main driver of the Pound US Dollar exchange rate on Thursday is expected to be the release of the latest US consumer price index (CPI) data.
If both core and headline inflation figures indicate a slowdown last month as expected, it could amplify expectations for a Fed rate cut and consequently weaken USD sentiment.
As for the Pound, UK economic data will remain scarce, which may result in Sterling continuing to trade without a clear sense of direction moving into Thursday’s European session.
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TAGS: Pound Dollar Forecasts