The US dollar remains weaker against sterling with mixed comments from Federal Reserve speakers keeping the US currency bouncing in and around key technical support and resistance levels.

The Federal Reserve meeting minutes could hold the key that may just unlock recent trading ranges. Any new information on the Federal Reserve taper debate could open up trading with an injection of volatility and there is a possibility of early moves ahead of minutes following a heavy line up of speakers. The US Treasury Secretary, Federal Reserve Chairman Ben Bernanke and US President Barack Obama are all expected to comment on the US economy and their remarks may just encourage more concrete bets either in favour or against the greenback.

In anticipation of renewed currency market volatility, corporates and SME’s ramped up FX trading activity with British importers taking advantage of the pound’s latest upswing against both the US dollar and euro while exporters renewed protection strategies.

Sterling

Sterling dipped on a bout of profit-taking as corporates and SME’s took advantage of the currency’s latest upswing to lock in favourable exchange rates against the euro and US dollar as both sterling/euro and Cable trade close to 2013 highs. Investors continued to back the British currency and sterling has recouped some losses ahead of the Bank of England’s meeting minutes. Minutes from the bank’s earlier policy meeting may strengthen bullish hopes that Britain’s faster economic recovery may also accelerate a fall in UK unemployment. The BoE said that it will consider raising interest rates only when unemployment reaches 7 per cent which it expects to happen in 2015.

US dollar

Mixed comments from two Federal Reserve officials about the outlook for US monetary policy kept the US dollar bouncing around one-week lows against the euro and a currency basket. The US Treasury Secretary, Federal Reserve Chairman Ben Bernanke and US President Barack Obama are all expected to add further comments about the US economy and their comments may just encourage more concrete bets either in favour or against the greenback.

Euro

The euro plunged to January lows against sterling at the beginning of this month after the ECB cut rates to a record low and hinted that more support for the economy may be required. Still, any optimism about the eurozone’s economic recovery could prove short-lived if more critical PMI surveys covering the region’s manufacturing and services industries miss estimates.

Sign up to our free newsletters

Get the best updates straight to your inbox:
Please select at least one mailing list.

You can unsubscribe at any time by clicking the link in the footer of our emails. We use Mailchimp as our marketing platform. By subscribing, you acknowledge that your information will be transferred to Mailchimp for processing.