For the USD, GBP, and EUR, the Calm Before the Storm
On the currency markets today, there is a sense of quiet before the storm as traders prepare for a week of interest rate announcements that will reveal the central banks' monetary plans for 2023 throughout the US, UK, and EU.
After trading flat on Sunday, cable has stabilized below the 1.24 line and is down 0.2% this morning, while the US Dollar Index (DXY) is up approximately 0.13%.
In the longer term, DXY has lost roughly 3% from the intra-month high, a pattern that is unlikely to reverse if the Federal Reserve delivers a 25 basis point rate rise on Wednesday, as is very anticipated.
To complement the United States' northern neighbor Canada's surprise move last week, the Fed may even announce a suspension in rate rises entirely.
The Bank of England is expected to boost interest rates by 50 basis points on Wednesday, which should be a positive stimulus for the GBP/USD pair.
The EUR/USD pair scarcely moved throughout the Sunday session, a pattern that continued this morning, with the pair shedding a few pips to 1.086.
Today's Eurozone economic mood indices are predicted to indicate moderate gains in the manufacturing and service sectors.
After experiencing huge mood swings earlier this month, the EUR/GBP has steadied around 87.67p, despite scarcely registering any price activity in the last two trading days.