USD Stable as We Approach The FOMC Decision
In today’s fundamental analysis: Overnight, the dollar traded flat against a basket of global currencies on Monday, failing to capitalize from a slump in sterling, but expectations that the Federal Reserve (FED) will increase its benchmark rate on Wednesday limited downside momentum.
- GBP/USD weakened after the shock result of Thursday’s UK general election, which left Prime Minister Theresa May short of a parliamentary majority that would have strengthened her hand as Britain prepares for Brexit negotiations with Europe.
- The euro declined, extending losses for the sixth consecutive session. The European currency traded 0.1 percent down at 1.1192, having touched a low of 1.1166 last week, its lowest since May 31.
- Gold drifted lower in the Asian session on account of the Fed meeting set to be held today and tomorrow (13th and 14th June). The yellow metal hit a low of $1262 and it is currently trading around $1264.
- The Fed is expected to raise its federal fund’s target to between 1% and 1.25% from 0.75% and 1% after the conclusion of the two-day meeting on Wednesday. Investors will pay close attention to the press conference for the clues of reduction in $4.5 trillion balance sheet.
- AUD/USD traded at 0.7559, up 0.24%, while USD/JPY was last quoted at 110.03, up 0.07%. GBP/USD fell 0.06% to 1.2652.
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