The Pound has begun Wednesday trading in a tight range against the US Dollar (GBP/USD), Euro (GBP/EUR) and New Zealand Dollar (GBP/NZD), as markets await the latest Federal Reserve interest rate decision and UK data.
Pound to Euro to Fluctuate on UK Home Loans Data and Brexit
While it’s a quiet day for Eurozone data, the Pound to Euro (GBP/EUR) exchange rate will still have plenty of opportunity to move. Brexit developments will continue to create Sterling exchange rate fluctuations, and the UK’s latest data could also add to the mix.
The latest UK Loans for House Purchase stat will be revealed for August, with economists expecting an increase of 39,700 following July’s 39,584. Meanwhile, the Confederation of British Industry (CBI) will also release it’s latest Reported Sales numbers; comments from the CBI have been influential for the Pound exchange rate in the past.
US Dollar Awaiting Federal Reserve Interest Rate Decision
However, the US is likely to steal the show today with the latest Federal Reserve interest rate decision taking place. It’s widely expected that the Federal Open Market Committee (FOMC) will hike rates from the current 2.00% to 2.25%. Following the rate decision, Federal Reserve Chair Jerome Powell will hold a press conference to discuss the development, which could be market moving for investors in the US Dollar.
‘With bets this stacked for the Federal Reserve to continue raising rates, the risk is that the Fed disappoints, and the Dollar promptly slides.’
– Eimear Daly, Global Reach Chief Economist
Much later today, the Reserve Bank of New Zeland (RBNZ) will make its own interest rate decision. Markets expect the Kiwi central bank to keep rates on hold at 1.75%, but have been looking for clues as to when the RBNZ might look to hike. The Pound to New Zealand Dollar (GBP/NZD) exchange rate resides in the region of 1.9773 this morning.
The Pound US Dollar currency pair is trading at 1.3170 while the Pound Euro exchange rate is in the region of 1.1197.