Sterling was under renewed pressure against the Dollar during late trading on Wednesday as sellers exploited the hawkish FOMC meeting to send the GBP/USD to fresh two-week lows at 1.2507. The ongoing Brexit uncertainty this quarter has made it increasingly difficult for sterling to maintain gains while dollar’s explosive rebound from the rising prospects of further U.S. rate hikes in 2017 could expose the GBP/USD to steeper losses.
The Euro/Dollar was exposed to extreme levels of volatility during trading on Thursday following the European Central Bank’s market shaking decision to taper its monetary stimulus to the Eurozone from April 2017 until the end of December 2017 or beyond.
The Greenback edged higher against a basket of currencies on Tuesday with prices stabilising above 100.00 as investors adopted a defensive stance ahead of next week’s FOMC meeting. With the CME Fed watch tool displaying a healthy 94.9% probability of an interest rate increase this month, much attention may be directed towards the intensity of rate hikes in 2017.
WTI Crude staged a savage rebound during trading on Wednesday with prices clipping $49 following the shocking OPEC production cut deal which eased some concerns over the excessive oversupply in the markets.
The heightened expectations of a U.S. interest rate hike in December has empowered the Greenback against a basket of currencies with prices currently hovering around 101.40 as of writing. Sentiment is firmly bullish toward the dollar with the currency on track for its strongest two-month gain since early 2015 amid the Trump effect.