Sterling remained under pressure amid political and economic reservations.

Tight ranges prevailed on Tuesday ahead of Fed Chair Powell’s congressional testimony.

The dollar maintained a firm tone amid reduced expectations of aggressive Fed rate cuts over the next few months.

Sterling remained under pressure amid political and economic reservations with the Euro also struggling for support.

Gold briefly recovered ground after reports of tensions over Taiwan, but still registered net losses amid the firm US dollar tone.

Oil prices were underpinned by a dip in Russian output and Iran tensions with a large draw in API inventories also triggering price gains.

Commodity currencies were unable to make headway with the Canadian dollar hampered by caution ahead of the Bank of Canada meeting. Bitcoin pushed above $13,000 as sentiment remained strong.

Sterling came under renewed pressure in early Europe on Tuesday amid an underlying lack of confidence. There were further concerns over the short-term growth outlook ahead of the industrial production and GDP data on Wednesday. There are expectations of a rebound following April’s slump in manufacturing, but a tepid improvement would reinforce fears that second-quarter GDP would register a contraction.

The shift in market expectations towards expecting a Bank of England cut in interest rates over the next 12 months continued to undermine net support.

Sterling was unable to gain any support from the Labour Party move to edge closer to backing a second Brexit referendum and backing a remain vote. There was also little support from a House of Commons vote which could make it more difficult to suspend parliament. GBP/USD dipped to below 1.2450, close to 2-year lows, while GBP/EUR is heading towards the 1.110 level. Sterling remained under pressure on Wednesday amid an on-going negative market sentiment ahead of the data releases.

Economic Calendar

07:45Industrial Output MM(MAY)0.30%0.40%
09:00Industrial Output MM SA(MAY)0.10%-0.70%
09:00Industrial Output YY WDA(MAY)-0.40%-1.50%
09:30GBP Industrial Production (M/M)(MAY)-0.70%-2.70%
09:30GBP Industrial Production (Y/Y)(MAY)1.00%-1.00%
09:30GBP Manufacturing Production (M/M)(MAY)-1.00%-3.90%
09:30GBP Manufacturing Production (Y/Y)(MAY)2.20%-0.80%
09:30GBP Trade Balance(MAY)-13.00B-12.11B
09:30GBP Trade Balance Non EU(MAY)--4.60B
12:00USD MBA Mortgage Applications--0.10%
15:00USD Wholesale Inventories(MAY 01)0.40%0.40%
15:00CAD BoC Rate Decision-1.75%
15:00Fed's Chair Powell Testifies--
15:00BOC Rate Statement--
15:15BoC Press Conference (Q/Q)--
15:30USD Crude Oil Inventories-2.964M-1.085M
18:10BoE MPC Member Silvana Tenreyro Speech--
18:30FOMC Member J. Bullard Speaks--
19:00USD Fed FOMC Minutes--
23:45NZD Electronic Card Retail Sales (M/M)(JUN 01)--0.50%
23:45NZD Electronic Card Retail Sales (Y/Y)(JUN 01)-3.20%

*All rates shown are indicative of interbank rates and should only be used for indication purposes only. It is important to note that foreign exchange rates fluctuate and that rates may vary depending on the amount and the base currency that is purchased or sold. Rates are correct as of 8:00am UK time. CentralFX are not responsible for the rates shown.