US Dollar (USD) Investors Await Federal Reserve Interest Rate Decision

Published: 30 Jan at 3 PM Tags: Euro, Dollar, Pound Sterling, America, UK, Eurozone, Australian Dollar, New Zealand Dollar, Canadian Dollar, Australia, New Zealand, USA, Canada, China, Germany, Ireland,

Pound Sterling (GBP)

The Pound (GBP) failed to make any significant gains today despite recovering from the sudden drop after last night’s passing of the ‘Brady’ Brexit amendment, which was favoured by the Conservative government and Prime Minister Theresa May for its addressing of the controversial Irish backstop issue.

Today also saw the Pound take a hit from poor UK mortgage approvals figures for December, which to 63.793K, although this result was better-than-expected.

Sterling investors, however, are remaining generally cautious as Theresa May prepares to face the EU in renegotiations over the Irish backstop – despite the EU being resolute that this will not be possible.

US Dollar (USD)

The US Dollar (USD) has remained flat today as ‘Greenback’ investors await this evening’s interest rate decision from the Federal Reserve, which is expected to remain static at 2.5%.

USD traders are apprehensive despite the recent reopening of the US government after weeks of being partially shut down, with increasing fears that a second partial shutdown could impact the US economy.

Any dovish comments made during the Federal Open Market Committee press conference this evening could see the ‘Greenback’ weaken.

Euro (EUR)
The Euro (EUR) stumbled today after the publication of the Eurozone’s business climate figures for January fell below expectation to 0.69, weakening confidence in the bloc’s economy.

EUR investors are also apprehensive after yesterday’s UK House of Commons vote which saw the success of the ‘Brady’ amendment, with concerns rising that the EU will not concede with the UK on the Irish backstop issue and potentially throwing Europe into further political uncertainty.

Today also saw the publication of Germany’s harmonised CPI yearly figures for January which came in steady at 1.7%, leaving EUR generally unmoved.

Australian Dollar (AUD)

The Australian Dollar (AUD) benefited today from the publication of Australia’s CPI figures for the fourth quarter, which showed a better-than-expected increase to 1.8%.

‘Aussie’ has had some of the gains clipped, however, as increasing concerns are rising over US-China trade tensions as debates are once again set to heat up following the US making a series of controversial remarks concerning last years’ arrest of Chinese tech giant Huawei’s Chief Financial Officer.

New Zealand Dollar (NZD)
The New Zealand Dollar (NZD) has been left steady today due to a lack of significant data releases.

Many ‘Kiwi’ traders however are cautious due to fears of that the Reserve Bank of New Zealand will be forced to cut its interest rates into 2019, with mounting worries that New Zealand’s economy is slowing down.

Canadian Dollar (CAD)

The Canadian Dollar (CAD) has been rudderless this week without any data releases of note until tomorrow, which will see the publication of Canada’s GDP figures for November.

‘Loonie’ investors are increasingly focusing on Canada’s ongoing tensions with China over the tech giant’s CFO Meng Wanzhou’s case, which has heated up again recently.

This followed Canadian Prime Minister Justin Trudeau firing John McCallum, the now former Canadian Ambassador to China, over comments relating to the case.

As of Wednesday, 30th January 2019, the Pound Sterling currency rates mentioned within this news item were as follows:

GBP EUR exchange rate was 1.1421, GBP USD exchange rate was 1.312, GBP AUD exchange rate was 1.8084, GBP NZD exchange rate was 1.9022, GBP CAD exchange rate was 1.7241, and GBP CNY exchange rate was 8.812.

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