The Market Has Strong Expectations Of An Even More Hawkish Fed (EUR/USD, USD/CHF), Pound Sterling Tumbled Amidst Investor Sell-off Sentiment (EUR/GBP, GBP/USD)
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Summary
- US Dollar supported by prospects of a hawkish Fed.
- The Pound sterling remains vulnerable to further losses against the Euro.
Expectations of a hawkish Fed is driving the dollar up.
The market is reflecting bearish signals for this currency pair. As expectations for the Federal Reserve to continue on its hawkish path, and raise interest rates even higher at the next FOMC heighten, the US Dollar is strengthening. A hawkish move from the Fed will likely drive the US Dollar higher as it will gain a yield advantage over its G10 peers. Uncertainty around driving the US economy into a recession also brings about the appeal for the US Dollars liquidity.
EUR/USD Price Chart
Pound Sterling tumbles in the wake of investor sell-off sentiment
The market is reflecting bullish signals for this currency pair. The Pound sterling remains vulnerable to further losses against the Euro following the losses experienced in the last 24 hours which was driven by the strong risk-off sentiment that has been seen by the global markets, which is also linked to the strong expectations for larger interest rate hikes at the US Federal Reserve.
EUR/GBP Price Chart
US Dollar/Swiss Franc (USD/CHF) Bullish
The market is reflecting bullish signals for this currency pair. With expectations for the US Federal Reserve to further tighten monetary policy, the US Dollar is strengthening against most of its counterparts, including the Swiss Franc.
USD/CHF Price Chart
UK employment data released
UK jobs data was released early on Tuesday, which reflected an employment change for March beating estimates whilst the employment statistic missed expectations. The initial reaction to this data saw the pound sterling weaken against the US Dollar as the ease in the labor market could be a signal towards the start of an economic shift.
GBP/USD Price Chart
Sources: finance.yahoo.com, dailyfx.com, poundsterlinglive.com
