The pound is rising on Wednesday against the dollar on the back of statistics on inflation in the UK, which exceeded analysts ‘ forecasts and the Bank of England’s target, according to trading data. The pound/dollar exchange rate (GBP/USD rate) rose to $ 1.41 from the previous close of $ 1.408.
Euro rose to $ 1.2125 from the previous close of $ 1.2124 per euro, while the dollar-yen exchange rate declined to 109.97 yen from the previous close of 110.07 yen per dollar. The dollar index (the dollar’s exchange rate against a basket of currencies of six countries — the main trading partners of the United States) declined by 0.06%, to 90.48 points.
Risk-related currencies were slightly higher, with the New Zealand dollar up 0.3% to $ 0.7144 and the Australian dollar, which is seen as a measure of risk appetite, up 0.2% to $ 0.7703.
Pound to dollar exchange rate – moving factors to consider
Earlier, the pound rose 0.2% to $ 1.4112 after UK inflation unexpectedly exceeded the Bank of England’s 2% target in May.
In the oil market, the price of Brent crude reached its highest since April 2019 due to a combination of post-pandemic demand and limited production. The dollar was steady on Wednesday; currency markets were generally calm ahead of the US Federal Reserve meeting, at which investors will look for any signs of a reaction to the jump in US inflation.
US stimulus is expected to stay
The Fed will wrap up its policy meeting later today and release new economic forecasts along with a policy statement at 18:00 GMT). The central bank is expected to acknowledge the first conversations among its policymakers about when and how quickly to scale back the massive bond-buying program launched in 2020, but most investors think the Fed will refrain from any hints of reducing stimulus in the near future.