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  • Writer's pictureMike Paterson

FOMC leaves markets second-guessing still

Last night the US Fed FOMC published the Minutes to their last interest rate meeting and produced the expected mix of cautious tones, domestically and globally, while still suggesting a chance of hikes if circumstances/data allow. The Fed is another major central bank that finds itself between a very big rock and an equally hard place. The Greenback found a few buyers initially but nothing of real note as the jury remains out.

Yesterday the Pound make some further gains on renewed positive Brexit outcome hopes but that's been tempered by the defection of three Tory MPs to join the breakaway Labour MP-led Independent Group. Plenty of talk about a significant number of others ready to jump ship. Meanwhile May fiddles while the UK burns.

GBPUSD had a brief look above 1.3100 but has since retreated to test 1.3025 support with rally-sellers, including me, ever poised. EURGBP has traded tightly as the Pound went on a round-trip.I remain GBP bearish overall and continue to rally-sell. Still no change as far as I'm concerned right now.The latest Brexit sentiment changes only highlighting how fragile/fickle the issue remains while the political mess unfolding can not be deemed positive. Equally there are plenty in favour of buying dips at the moment too so I expect to see good two-way business.

EURUSD is also still making its mind up and has tested the 1.1380 res/offers before falling back to 1.1320 while USDJPY has found support again at 110.50 after failing into 111.00 yesterday and also continues to trade tightly. USDCHF duly found some dip demand at 0.9980 but failing at 1.0020 so far with EURCHF tightly bound still and EURUSD variable.

AUDUSD had a wild ride testing 0.7200 res/offers on stronger jobs data only to fall back and test 0.7080 on dovish interest forecasts from Westpac and some more negative-sentiment towards Australia from China. USDCAD continues to trade tightly amid the current USD uncertainty.

Fickle Forex markets ever prevailing so be ready with your orders as always.

Have a good day one and all.

Interbank Rate 07.37 GMT

GBPUSD   1.3033

EURUSD   1.1337

EURGBP   0.8700

GBPEUR   1.1493

GBPAUD   1.8321

GBPCAD   1.7190

USDJPY   110.79

EURJPY   125.59

GBPJPY   144.37

GBPZAR   18.1912

GBPHKD   10.1045

GBPNZD   1.9142

AUDUSD   0.7110

EURCHF   1.1353

USDCAD   1.3194

USDCHF   1.0014

EURHKD   8.7919

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