Two major global events managed to take the lion’s share of the foreign exchange market’s attention on Tuesday and into Wednesday.
The decision of the US central bank, the Federal Reserve, was awaited by traders.
The decision is due to come at 6pm GMT today (Wednesday), and has been under consideration since yesterday when the Federal Open Market Committee’s meeting began.
The foreign exchange markets have now already priced in a likely cut to interest rates from their current position of 2% down to 1.75%, although, of course, anything could happen.
In practice, the release that analysts and traders will no doubt watch most closely will be the policy outlook message which hints at the potential future decisions of the Fed.
It is likely that the Fed will indicate that no further rate cuts are on the cards for December – although it is expected to say that it will keep possible rate cuts as a weapon in its arsenal just in case there are any significant economic shifts.
As a result of the developments and the waiting, the greenback was noticed at $1.1111 in its pair against the single European currency.
This represented a steady position for it.
In its index, which is a tool designed to monitor how the currency is performing in comparison to other major currencies across the globe, the dollar was seen at 97.682.
In its pair with the safe haven Japanese yen, the dollar was noted at 108.83 – which represented very little change.
The other major news event which affected the foreign exchange markets was the announcement that the British government had managed to secure backing from parliament for its general election plans.
This means that the country will now go to the polls on 12th December.
The stated aim of the plan is to supposedly break the Brexit deadlock which has now affected the House of Commons for years.
Currently, Boris Johnson’s Conservative Party leads in the polls – although the election remains several weeks away, and analysts are predicting that the electorate in this election is likely to be particularly volatile compared to previous election cycles.
The markets responded positively to this news.
In its pair with the US dollar, the pound was spotted at $1.2903 over the course of the night.
Global trade was also on the agenda on Tuesday.
A new twist in the trade battle between China and the US emerged, after it was revealed that the planned basic trade agreement between the two large economies may run out of time to be drafted and ready to go by the expected signing date.
Signatures were expected to be exchanged in Chile at a meeting in November.
However, comments from a US government official suggest that this might now be off the cards.
Overall, however, the two countries are still believed to be wedded to the idea of striking an agreement at some stage or another, which if it transpires is likely to put an end to what has been one of the most bitter trade wars in some time.