GBP/USD: Eye son FOMC minutes, pressured into the event

• GBP/USD under pressure despite the US dollar’s woes. 
• Markets will tune into the FOMC minutes at the top of the hour for next catalyst. 

GBP/USD is currently trading at 1.2236 between a low of 1.2221 and a high of 1.2287 as we await the minutes from the Federal Open Market Committee. The pound has been pressured while the US attempts to hold on to the 99 handle in the DXY for dear life.

DXY is -0.44% at the time of writing. Despite the disappointing report over a potential coronavirus treatment, investors remain optimistic with both US stocks and European markets performing positively. In afternoon trading, the Dow Jones Industrial Average was up 290 points, or 1.2%. The S&P 500 and Nasdaq Composite gained 1.4% and 1.7%, respectively. The small-cap Russell 2000 index jumped 2.6%.

• Fed’s Kaplan: Expecting a good, slow recovery in 3rd and 4th quarters

For a prelude ahead of the FOMC minutes at the top of the hour, “Fed officials did not announce any new actions or make any major change to the statement at the FOMC meeting,” analysts at TD Securities note who explained:

Even so, the tone remained dovish, as we discussed in FOMC: “Considerable Risks” Over Medium Term. And while forward guidance did not change significantly, the chairman made clear in his press briefing that he and his colleagues “are not going to be in any hurry to move rates up.’

He suggested that they will have more specificity on how long rates are likely to be near zero ‘soon enough.’ In that context, we will be looking to the minutes for guidance on when and how forward guidance on QE as well as the funds rate will be made more specific.

GBP/USD levels