Pound Leads Rally Against Dollar on Fixing Demand, Scottish PollBy and
Dollar slips as traders seek four dot plots from Fed guidance
YouGov poll shows 57% Scottish voters want to remain in U.K.
The pound led a rally against the dollar in early European trading, retracing the loss from Tuesday, as fixing-related demand triggered stop-loss orders.
Sterling advanced as much as 0.9 percent to $1.2256, after falling by the same amount yesterday, with a YouGov poll for The Times showing that 57 percent of Scottish voters want to remain inside the U.K. compared to 43 percent who seek independence. The dollar fell against major peers as traders wait to see if the Federal Reserve would signal four rate rises this year, from the three flagged earlier.
“There’s a bit of a push lower in the dollar ahead of the Fed decision, which is putting some pressure on short sterling positions,” said David Forrester, G-10 FX strategist at Credit Agricole SA’s corporate and investment-banking unit in Hong Kong. “There is also some news of polls suggesting that Scottish people don’t support leaving the U.K.”
Fixing-related demand triggered stop losses above $1.2200 for the pound, a trader in Europe said. Offers around $1.2250 by macro accounts capped the move, the trader added.
- GBP/USD rallies to a one-week high after falling Tuesday to 1.2110, its lowest in 2 months
- Bloomberg Dollar Spot Index falls 0.2% after advancing 0.3% Tuesday; 2- and 10-year Treasury yields are little changed at 1.38% and 2.59% respectively
- “If the Fed raises its dot plot to suggest four rate hikes this year and if Yellen sounds hawkish, the dollar can extend its gains further,” said Keisuke Hino, a trader at Mizuho Bank
- AUD/USD rises 0.2% to 0.7580 ahead of a report due Thursday which is forecast to show employment increased 16,000 last month compared to revised 13,700 gain in December
- March consumer confidence increases 0.1% m/m to 99.7, data Wednesday showed
- NZD/USD gains 0.3% to 0.6936; NZD strength from purchases against AUD has brought option-related AUD/NZD bids in front of large 1.0900 strikes into play, according to an Asia-based FX trader
— With assistance by Michael G Wilson