Pound US Dollar (GBP/USD) Exchange Rate Muted as Peace Talks Continue
The Pound US Dollar (GBP/USD) exchange rate is trading within a narrow range today. The currency pair is likely seeing reduced bets ahead of interest rate decisions from the Federal Reserve and Bank of England (BoE). Meanwhile, ongoing peace talks between Russia & Ukraine have seen a gradual return of risk appetite. This has likely bolstered the Pound (GBP) and limited gains for the safe-haven US Dollar (USD).
At time of writing the GBP/USD exchange rate is at around $1.3051, virtually unchanged from this morning’s figures.
Pound (GBP) Buoyed as Risk Appetite Returns
The Pound is steadily climbing against its rivals today. A renewed focus on risk-on trading is likely helping to boost Sterling.
GBP is likely benefitting from a a fourth round of peace talks between Ukrainian and Russia today. Mykhailo Podolyak, a Ukrainian negotiator, said ahead of today’s talks that Russia was ‘beginning to talk constructively’. The Pound could climb higher should there be significant progress in the talks.
Former Russian foreign minister Igor Ivanov has backed the calls for a ceasefire. Ivanov called for an end to the ‘unjustifiable’ loss of civilian life.
Expectations of an interest rate hike from the BoE may also be helping to boost Sterling today. The central bank is expected to raise rates despite uncertainty caused by the war in Ukraine. Investors may be limiting bets on the currency today ahead of Thursday’s meeting.
US Dollar (USD) Slides as Investors await Fed Interest Rate Decision
The US Dollar is dropping against many of its rivals today. Demand for USD has seen a pullback today amid fresh peace talks between Russia and Ukraine. An uptick to US Treasury bond yields may be preventing significant losses for USD however.
Optimism for progress in the talks has been high although the US, UK, and other Western nations have expressed scepticism at Russia’s willingness to negotiate. The US Dollar could be boosted if the talks are unproductive.
The safe-haven ‘Greenback’ could see increased trading amid further escalation in the conflict. On Monday morning multiple casualties were reported after an artillery shell hit a nine-storey apartment building in Kyiv.
Ahead of the Fed’s Wednesday meeting, an anticipated rate hike may be helping to underpin USD. The central bank is set to hike interest rates for the first time in three years this week.
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