Sterling drew some comfort from the fact the EU granted an extension to the Article 50 negotiating period until April 12. In spite of an advancing dollar, the British pound retested 1.31 Friday as support and reclaimed 1.32+ status into the week’s end.
US dollar rebounded Thursday, reclaiming a large portion of Wednesday’s lost ground after the Federal Reserve jolted markets by abandoning all plans to raise interest rates this year.
The US Federal Reserve, as expected, kept interest rates unchanged at 2.25-2.50% Wednesday. The trajectory of rate hikes was also narrowed, with the central bank stating it will not hike interest rates this year amid a slowing economy.
Underpinned by a softer greenback, the EUR/USD extended gains for a third consecutive day Tuesday, up 0.13%. The buck is seemingly weaker on fears of a dovish Fed, with the central bank widely expected to keep policy unchanged today.
EUR/USD bulls went on the offensive Monday, extending Friday’s rally. Up 0.10%, the pair is closing in on a daily channel resistance etched from the high 1.1569.
