The Pound Sterling remained below the $1.29 threshold during London trade on Wednesday after the news that consumer inflation fell 1.8% in January, below expectations, to a 2-year trough. Markets are generally dismissing the data and focusing instead on the Brexit talks, with many believing that volatility will pick up tremendously until the March 29th deadline, especially given the lack of progress. It was rumored that there are now only two options for British lawmakers; one is to back the deal that the Prime Minister is attempting to push through and the other is to extend the deadline beyond March.
As reported at 11:30 am (GMT) in London, the GBP/USD was trading at $1.2887, down 0.04% and within today's trading range of $1.2874 and $1.2923. The EUR/GBP is also lower at 0.8781 Pence, down 0.06%, off the session low of 0.87668 Pence.
Kiwi Dollar Lifted by RNBZ Stance
In New Zealand, the central bank maintained a “business as usual” posture and kept its lending rate at the current 1.75%. Analysts and FX traders were concerned that the recent policy shift from the Federal Reserve might have influenced other central banks. News that the Reserve Bank of New Zealand was not intimidated by the Fed's policy shift helped to lift the Kiwi higher, with the NZD/USD pair trading at $0.6818, a gain of 1.23%; the pair had earlier hit a peak of $0.68530 while the low was recorded at $0.67277.