EUR/USD: The euro edged lower against the dollar on Wednesday as two Federal Reserve officials said a period of high inflation in the United States could last longer than expected, a day after Fed chief Jerome Powell downplayed mounting price pressures. Atlanta Fed President Rafael Bostic said that this year expected growth rate is 7%, and inflation is much higher than the Fed’s 2% target. He now expects interest rates to rise later in 2022. The dollar index rose to 91.80, but remains below the two-month high of 92.40 reached on Friday. Immediate resistance can be seen at 1.1966. The breakout to the upside can trigger growth towards 1.2000 (psychological barrier).
GBP/USD: Sterling rose against the dollar on Wednesday, as it continued to recover after its decline in the wake of last week’s Federal Reserve meeting. Recent movements in the pound have been dollar-driven, as investors price in earlier than expected asset purchase tapering from the Federal Reserve, after the US central bank signalled higher rates last week in 2023. Today the dynamics of the pound will depend on the results of the Bank of England meeting. If the regulator hints at the possibility of a rate hike in the future, the pound will continue to rise. Immediate resistance can be seen at 1.4000. The breakout to the upside can trigger growth towards 1.4080.
USD/CAD: The loonie was little changed against its US counterpart on Wednesday, holding onto this week’s gains as oil rose, and Federal Reserve Chairman Jerome Powell reassured markets that the FED would not rush interest rates. As the Fed took a more aggressive stance, the market was volatile last week, but Powell said on Tuesday that it would take longer for the economy to recover from the COVID 19 crisis before higher borrowing costs become reasonable, which puts pressure on the US dollar. The Canadian dollar was trading nearly unchanged at 1.2306 against the greenback. Immediate support can be seen at 1.23. A breakout below could take the pair towards 1.22.