Following a subdued move through the major part of Tuesday’s trading action, the cable gained some traction in the wake of some aggressive US dollar selling, triggered by the Fed’s surprise move to cut interest rates by 50bps, Haresh Menghani from NDDFX informs.
“The US central bank delivered an emergency cut ahead of the FOMC meeting on March 18 to cushion the potential impact from the spread of coronavirus on the economy.”
“The Fed Chairman Jerome Powel said that the fundamental of the US economy remained strong but the coronavirus outbreak posed evolving risks to the outlook.”
“Expectations that the Bank of England might also cut interest rates at its upcoming meeting on March 26 further collaborate towards capping gains.”
“Market participants now look forward to the final UK Services PMI for some short-term impetus.”
“Later during the early North-American session, the US economic docket – featuring the releases of the ADP report on private-sector employment and the ISM Non-Manufacturing PMI – might influence the USD price dynamics and further contribute towards producing some meaningful trading opportunities.”