The GBP/USD exchange rate was under significant pressure around the 1.3350 level in early European trade on Wednesday in the foreign exchange market. This jump marks a minor step back as the duo starts to eat away at some of their weekly advances. Market participants are closely focused on next Wednesday’s U.S. Federal Reserve policy statements. All of these changes will surely continue to influence their trading behavior going forward.
The surge in demand for the U.S. dollar is applying severe pressure to the GBP/USD pair. Unsurprisingly, traders are preparing for the Fed’s soon-to-be-released guidance. The duo that had shown considerable resilience earlier in the week now finds itself with headwinds that could reconfigure its path.
“GBP/USD stays pressured near 1.3350 amid US Dollar demand ahead of Fed” – www.fxstreet.com
Simultaneously, gold prices have been under acute selling pressure early Wednesday, sharply correcting from two-week highs of $3,435. Much of that drop can be blamed on recent optimism surrounding U.S.-China trade talks. Traders are re-positioning the market sentiment and profiting ahead of key policy announcements from the Federal Reserve.
Following a volatile month, investor demand and nervousness had swelled gold prices, as investors turned towards commodities in reaction to ongoing geopolitical crisis. The renewed optimism over the US-China trade negotiations has changed the focus. The market remains in short covering mode as traders and investors assess the possible impact of these discussions on the state of global economic affairs.
“Gold corrects from two-week highs, Fed decision eyed” – www.fxstreet.com
As the U.S. Federal Reserve gets ready to issue its own policy pronouncements, the financial markets are in transition themselves. The anticipation of further monetary policy adjustments drives a surge in U.S. dollar demand, impacting both currency and commodity markets.