Good morning,

Momentum from buyers carried GBP/USD to fresh highs yesterday, with the pair continuing to gain strength and pushing above 1.2770 which is a rate unseen since March, a three-month high. As Josh discussed in yesterday’s update, you have to look at both sides of the coin when considering currency movements. Despite the pound gaining strength off the back of an increased risk appetite in global stock markets, the moves have mainly been underpinned by dollar weakness, which has weakened every day so far this month.

All eyes continue to be on the US today, with the Federal Reserve holding their first policy meeting since the outbreak of COVID-19 reaching their shores. The interest rate decision is expected to be released at 18:00 BST with Fed chair Jerome Powell following with a press conference at 18:30 BST. Markets will be looking to his speech for signs of economic health in the US and how the country is recovering post-COVID. There are not expected to be any headline changes to the interest rate, with some banks expecting the rate to stay near to 0% for the next few years. Previously the central bank has ruled out negative interest rates, so should there be any whisper of that, markets could become extremely volatile, potentially moving 1.30 into sight.

As always, our online trading site will remain open throughout this risk event. It could also be worth a call with your relationship manager at some point today to see how we can take advantage of any favourable movements, as well as how best to mitigate any risks that could arise this evening.

Have a great day,

Author: Jack Nicholls, Relationship Manager


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