Following Wednesday’s surprisingly hawkish performance from the Federal Reserve, the US dollar managed to increase its gains across yesterday’s trading session. The market’s response to the Fed announcement has been most prevalent across foreign exchange markets. Bond and stock markets have reacted but the greenback has been the main beneficiary of the US central bank’s hawkish rhetoric.
The pound was the most resilient against the buck’s plight, encountering only a 0.5% fall. The Swiss franc and euro saw much deeper pullbacks. The divergence between the euro and pound’s performance saw the GBPEUR pair march higher, touching the €1.17 level in early European dealing hours.
Today’s economic calendar is rather sparse. We’ve seen UK retail sales released a little earlier, they’ve printed much softer than expected which has placed the pound on the backfoot. Participants will mainly be focusing on the continued market response to the Fed announcement as the week draws to a close.
Written by Viv Savani. 9:07am, June 18th 2021
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