The battered dollar licked its wounds after reaching a 15-month low against a basket of global currencies during early trading on Wednesday, as investors repositioned ahead of a multitude of key risk events this week.
Asian shares were mostly mixed during early trading on Wednesday, while the Greenback held steady ahead of the Federal Reserve decision later today which is largely expected to conclude with monetary policy unchanged.
The fact that Sterling sharply depreciated across the board on Tuesday, after British inflation rates unexpectedly dropped to 2.6% in June, continues to highlight how the currency has become increasingly sensitive to monetary policy speculation.
It’s quite interesting how Sterling remains resilient despite being constantly bombarded by political risk and economic woes over the past year. Last week’s awe-inspiring rebound, which was trigged by Bank of England Governor Mark Carney’s hawkish remarks, is a testament to this, as the Britsh pound/U.S. dollar currency pair concluded Q2 above 1.3000.