British Pound Flutters As US Dollar Soars

Concerns Over GBP/USD Heading for a Fallout

Following the Federal Open Market Committee (FOMC) meeting of the Federal Reserve, the greenback soared while the British Pound slipped once again in wake of more controversy surrounding the British Prime Minister.

The instability and confusion regarding the future of PM Boris Johnson undermined the strong Sterling position. In fact, a full report about the PM’s activities that occurred during the Covid-19 lockdown is expected to be unveiled shortly. Accordingly, a potential political spill could further impact the GBP.

The Fed mainly announced expected news, however, Fed Chair Jerome Powell said that they would not rule out a rate hike if the situation calls for it. And it now seems almost certain that the Federal Reserve aims to stop asset purchases and push rates higher by their next meeting in March 2022.

Global Equities Entangled

Today both equities and bonds are slipping, as commodities also reel from the markets’ reaction. The looming global uncertainty increased market volatility. Meanwhile, crude oil made it to a new 6 years high, and gold fell 1.5% following the Fed announcement. The US Dollar holds its position as the best-performing currency, followed by JPY, CHF, then EUR.

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