Fed Could Offer Markets a ‘Breather’
- GBP/USD awaits Fed policy update
- Markets wary of another ‘hawkish’ tilt
- But bar for such a tilt is set very high now
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The midweek Federal Reserve announcement will be critical in determining whether a recent slump in equity prices and appreciation in the Dollar can continue, or whether a near-term rebound for ‘risk on’ assets transpires.
For the Pound to Dollar exchange rate it will determine whether levels last seen in December are tested and if an extension of a medium-term downtrend commences in earnest.
With major global stock markets plummeting in early 2022 and the Dollar rising again it is apparent investors are keenly aware that this year the Fed will raise interest rates and reverse its quantitative easing programme.
The sheer scale of the fall in U.S. equities and crypto assets hints at just how seriously the issue is now seen by investors.
The Dollar has reengaged appreciation mode too with the…
