USD, GBP, and EUR Trends Amid Fed Speculation.

  • USD strengthened as Fed Chair Powell suggested a lower likelihood of rate hikes due to expected falling inflation, boosting the Pound to Dollar exchange rate.
  • GBP struggled to break above 1.2500 against USD and below 1.1700 against EUR, facing resistance despite some intraday bullishness.
  • US ADP data showed increased private payrolls for April, but the ISM manufacturing index weakened, potentially impacting GBP performance.
  • EUR investors focused on factory sector PMI surveys for signs of economic momentum in the euro area.
  • Attention in the US was on various economic indicators, including job cut announcements and foreign trade numbers, amidst rising government bond yields.

USD: The Pound to Dollar exchange rate surged to 1.2550 following remarks from Federal Reserve Chair Jerome Powell, signaling a less likely rate hike amidst expectations of falling inflation. Despite some heat being taken out of U.S. bond markets and the Dollar, losses are expected to be contained as the Fed maintains interest rates at 20-year highs due to persistent inflationary pressures. Goldman Sachs maintains its forecast of two rate cuts this year, potentially leading to further Dollar weakness pending upcoming data.

GBP: Ahead of the Federal Reserve policy meeting, the Pound to Dollar exchange rate consolidated below 1.2500, while the Pound to Euro rate dipped below 1.1700. Despite some intraday bullishness, the Pound faces resistance, with the 200-day MA acting as a barrier. US ADP data showed increased private payrolls for April, but the US ISM manufacturing index weakened, potentially impacting the Pound’s performance.

EUR: Investor focus in the euro area shifts to factory sector PMI surveys, anticipating signs of continued economic momentum. In the US, attention is on various economic indicators, including job cut announcements, foreign trade numbers, and weekly jobless claims. Rising US government bond yields may affect loan growth for banks like StanChart, despite expectations of reduced interest rate cuts in the US.

*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.