Treasury, foreign exchange and commodities markets were characterized by large moves as traders positioned for Wednesday’s Federal Reserve meeting. GBP/USD has pulled back to 1.3350, as a stronger US dollar has continued the cautious theme seen in last week’s market mood. The British pound displays a classic bearish tendency. Unfortunately, this movement has led it to give back a chunk of its weekly gains.
Additionally, on Wednesday, GBP/USD had notable selling pressure, largely fueled by the firming up of the US dollar. Joint base dollar/loonie currency pair which swayed around the 1.3350 area. This underscores how intensely market participants are paying attention to the drama unfolding in advance of the Fed’s policy decision.
“GBP/USD retreats to 1.3350 as USD firms up ahead of Fed” – [“GBP/USD retreats to 1.3350 as USD firms up ahead of Fed” – source]
In the non-energy commodities sector, gold prices dropped back below $3,400 following a recent two-day spike. By Wednesday, gold prices had dropped by more than 1%. This decline occurred as broader market sentiment changed in reaction to progress on US-China trade talks. This weekend, China and the United States will begin those conversations in earnest. In response, the market has turned into more of a risk-on environment, which has lessened the demand for safe-haven assets, such as gold.
“Gold drops below $3,400 after two-day upsurge” – [“Gold drops below $3,400 after two-day upsurge” – source]
Analysts suggest that improvements in risk sentiment could potentially ignite a rally in Ripple (XRP) prices, should demand from large investors increase. On writing this, XRP is trading around $2.10 and doing a good job of maintaining stability and protecting important support levels.
“US-China trade talks could ignite XRP price rally as risk-on sentiment improves” – [“US-China trade talks could ignite XRP price rally as risk-on sentiment improves” – source]
EUR/USD pair all but unchanged, currently trading around 1.1350. Traders are left worried amid the unknown as they approach the Fed’s policy meeting. The pair is trapped in an increasingly tighter trading range. This highlights how delicately market participants are navigating expectations as they look forward to the possibility of an interest rate shifting.
“EUR/USD holds near 1.1350, awaits Fed policy decision” – [“EUR/USD holds near 1.1350, awaits Fed policy decision” – source]