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Mon 1 Jun 2020 08:44GMT

FOMC Decision Triggers USD Volatility - USD & GBP Stronger, AUD, NZD Decline

Published: 19 Mar at 10 AM Tags: Euro, Dollar, Pound Sterling, America, Eurozone, Australian Dollar, New Zealand Dollar, Canadian Dollar, Australia, New Zealand, USA, Canada, China,

Pound Sterling
A soft day of trading on Wednesday left the Pound close to a multi-year low against the US Dollar and at its lowest level for a fortnight against the Euro. However, the British asset has since recovered ground and returned to trending in the region of 1.39 against the Euro and 1.48 against the US Dollar.

With the ECB granting Athens less liquidity than requested – sparking renewed ‘Grexit’ fears in the process – the Euro fell by over 1% against a number of its peers, including the Pound and US Dollar. Today’s Economic Bulletin from the European Central Bank may inspire further fluctuations in the commodity driven currency.

US Dollar
In the immediate aftermath of the FOMC policy announcement, the US Dollar fell against most of its rivals. The Fed intimated that the labour market would have to continue improving before borrowing costs climbed, but as policymakers also removed the word ‘patience’ from their interest rate spiel, the ‘Greenback’ later rebounded.

Australian Dollar
The diverging policy outlooks of the Reserve Bank of Australia and Federal Reserve saw the ‘Aussie’ falter during the local session. Australian data had little impact on the performance of the South Pacific asset as investors remained concerned over slowing growth in China – Australia’s main trading partner.

New Zealand Dollar
Although New Zealand’s fourth quarter growth report initially bolstered the ‘Kiwi’ (by showing a stronger-than-anticipated pace of annual expansion in the final three months of last year) the Fed’s policy announcement pressured the asset lower before the close of trading.

Canadian Dollar
Ahead of tomorrow’s influential Canadian inflation data, the ‘Loonie’ was trading in the region of 0.7908 against the US Dollar – down 0.7% on the day’s opening levels. This week’s less-than-impressive Canadian Manufacturing Shipments and Wholesale Sales data has taken a toll on demand for the Canadian Dollar, as has the FOMC decision.
As of Thursday, 19th March 2015, the Pound Sterling currency rates mentioned within this news item were as follows:

GBP EUR exchange rate was 1.3835, GBP USD exchange rate was 1.476, GBP AUD exchange rate was 1.9274, GBP NZD exchange rate was 1.9862, GBP CAD exchange rate was 1.8748, and GBP CNY exchange rate was 9.1453.
Laura Parsons About Author: (357 Posts)Laura works in the financial sector as a currency analyst, studying the latest global economic developments and assessing their impact on the foreign exchange market. Laura uses her currency knowledge to write articles focussing on market movements and trends for several independent financial websites.

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