The US Dollar moved higher and reversed some of Monday’s losses as FX traders await the outcome of the Federal Reserve policy meeting. Analysts have predicted that the Fed is likely to hike interest rates at that meeting, with a 25 basis points increase already priced in. Traders are also anxious to hear what the new head of the Fed, Jerome Powell, will say regarding interest rates future trajectory. The majority of analysts and economists expect that there will be two more rate hikes in 2018, though if enough members of the FOMC seem to be leaning toward a third that could move the Dollar higher.
As reported at 11:00 am (GMT) in London, the EUR/USD was trading lower at $1.2314, a loss of 0.16% and off the session low of $1.23118 while the high is posted at $1.23547. The USD/JPY is trading at 106.324 Yen, up 0.28% and moving well away from the session peak of 106.608 Yen. The GBP/USD was trading at $1.4031, up 0.05%; the pair has ranged from a session trough of $1.4020 while the high is at $1.4067.
Fundamentals Eyed in UK
In the UK, several pieces of data were released earlier today which largely disappointed; producer prices fell in February as did retail prices on a year-over-year basis. The DCLH House Price Index also unexpectedly declined in February. Ahead, markets are looking to tomorrow’s release of labor figures, with analysts forecasting a slight rise in average earnings. The UK claimant count rate and unemployment figure are also due out tomorrow. Later in the US, all eyes will focus on the Federal Reserve policy decision and subsequent announcement from Jerome Powell.