GBP/USD Hits 1.28 as USD Stumbles

Good Morning;
Euro-dollar rallied yesterday, breaking US election highs to trade at its highest levels in a year, since the UK’s referendum, above 1.1370. Dollar weakness saw sterling-dollar hit 1.2800 in overnight trading. Sterling-euro fell below 1.1300 to test 2017 lows.
Previous Day’s Market Highlights
Euro-dollar rallied yesterday, breaking US election highs to trade at its highest levels in a year, since the UK’s referendum, above 1.1370. Dollar weakness saw sterling-dollar hit 1.2800 in overnight trading. Sterling-euro fell below 1.1300 to test 2017 lows.

The euro strengthened following comments from ECB President Draghi, who said that deflationary pressures had been replaced by inflationary ones and that factors weighing on inflation may be temporary, although with the caveat that accommodative policy remains necessary.

Markets focused on the hawkish comments and speculated that later this year the ECB may signal a further tapering of QE.

The dollar came under pressure on a delayed senate healthcare legislation vote and as Fed Member Harker took a cautious tone on inflation, which has recently softened.  Fed Chair Yellen reiterated that the Fed would raise rates only gradually.

Regards All.
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