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