A joint meeting of the Federal Open Market Committee and the Board of Governors was held in the offices of the Board of Governors of the Federal Reserve System in Washington, D.C., on Tuesday, May 2, 2017, at 1:00 p.m. and continued on Wednesday, May 3, 2017, at 9:00 a.m.
At the start of this week, the U.S. dollar initially rose against currencies that had performed well last week as traders banked some profit. However, the gains could not last long, especially against the euro. The EUR/USD surged past 1.12 handle to a new yearly high.
The British pound/U.S. dollar currency pair was the obvious choice for traders today ahead of growth figures from both sides of the pond. The cable started the day firm even though economists' expectations were downbeat about the UK growth prospects. Indeed, GDP actually came out weaker than expected at +0.3% quarter-over-quarter and 2.1% year-over-year. Growth was held back by the dominant services sector where output rose just 0.3%, the weakest performance since Q1 2015.
The U.S. economy grew at its weakest pace in three years in the first quarter as consumer spending barely increased and businesses invested less on inventories, in a potential setback to President Donald Trump's promise to boost growth.