BoE Super Thursday in Focus: Dollar Holds Steady

With the endless Brexit uncertainty still a sticky theme weighing heavily on the currency, Sterling’s upside gains in the medium to longer term remain limited. Investors will keep a close eye on the Bank of England (BoE) policy meeting on Thursday which is expected to conclude with interest rates left unchanged. Should the central bank sound remotely hawkish or hint of a potential rate hike this year, it has the potential to send the British Pound higher in the near term. Looking at the technical picture, bulls have some degree of control above the 1.3000 level.

Dollar rebounds as Fed quell rate cut hopes

Dollar bulls were injected with fresh inspiration thanks to the Federal Reserve sounding less dovish than expected on Wednesday evening.

With Jerome Powell indicating that the central bank’s current policy stance is appropriate, investors were forced to re-evaluate the probability of a rate cut by the end of 2019. The Dollar is seen pushing higher in the near term as recent positive economic data from the States ensure the Greenback remains a destination of safety in times of uncertainty. The next major risk event for the Dollar and will be the US jobs report on Friday. Confidence over the US economy is likely to receive a boost if the jobs data exceeds market expectations. Focusing on the technical picture, the Dollar Index is seen testing 97.90 if a daily close above 97.50 is achieved.

Commodity spotlight – Gold

The Dollar’s appreciation following the FOMC statement on Wednesday has offered nothing but pain and punishment to Gold with prices trading towards $1270 as of writing.

A less dovish than expected Federal Reserve was negative for Gold prices while optimism over US-China trade talks compounded downside pressures. With the Dollar likely to remain supported ahead of the US jobs report on Friday, the precious metal is seen breaking below $1270 in the near term. Should the pending NFP report exceed market expectations, Gold is likely to slide towards $1265.

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