As central banks, including the Fed, gear up to withdraw emergency supports, their timing could impact FX and gold markets.
Since the euro’s inception in 1999, the euro-US dollar exchange rate (EUR/USD) has been the world’s most widely traded currency pair. During its first 16 years, it traded in wide ranges, from a low of almost 0.8 to a high of nearly 1.6 dollars to the euro. For the past six and half years, however, EUR/USD has settled into a much narrower band from 1.04 to 1.25.
While Brexit-related politics have played a significant role in influencing GBP/USD’s recent price action, the exchange rate is also impacted by the price of oil, interest rates, and trade and budget surpluses and deficits.