The Pound Sterling earlier struck a 10-month peak versus the US Dollar, largely due to a weakened greenback after the Fed’s unexpected outlook on inflation. Yesterday, as largely expected, the Fed left the benchmark lending rate at the existing level; however, it’s inflation forecast was not as optimistic as it had been in the past. For investors, that perhaps meant that the Fed would maintain the status quo for a longer period of time, and the possibility of a 2017 rate hike is now diminished. The removal of a single word, “recently,” from the statement suggested that the Fed’s FOMC might not consider that the consumer price slowdown might not be as transient as first thought.
As reported at 11:17 am (BST) in London, the GBP/USD was trading at $1.31, a gain of 0.20%; the pair had hit a peak of $1.3157, a level not seen since last September. The AUD/USD edged higher to $0.801, a slight gain of 0.008%; the pair has ranged from a low of $0.79914 to a peak of $0.80666 in today’s trading session.
EUR Struggles Despite German Data
Against the Euro, however, the Pound has been struggling of late but has occasionally been able to pull ahead. The Euro’s recent rise is largely due to expectations that the ECB will soon be pulling back the reins on its quantitative easing program. Today, despite an unexpected uptick in the reading of consumer confidence in Germany, the Euro is struggling. The EUR/GBP is trading at 0.89128 Pence, down 0.47%; the pair has ranged from a session trough of 0.89012 Pence to a high of 0.89540 Pence.