GBP/USD rallies 60 pips on dovish Fed take, now awaiting Powell

• Fed dropped gradual rate increases pledges patient stance on future moves.
• Fed dropped balances of risks assessments.
• Fed says Market based inflation has moved lower.  

GBP/USD rallied on a dovish tone in the Fed statement on to the 1.31 handle having been as low as 1.3053 as US yields drop. The Fed's projects on growth suggest moderation next year and it makes significant tweaks to the FOMC statement which underpins the market's sentiment.

It was only back in Autumn where the Fed suddenly switched from hawkish to dovish and today's meeting confirmed the shift.

The Fed has switched from 'strong' to 'solid' with respect to economic activity, yet there is no real hint on forward guidance - (Perhaps a without a government shutdown there would have been clear projections?)

Either way, given the uncertainties over Brexit, it is difficult to price in a dovish Fed given low unemployment in the US, although the presser from Powell could shed some light on economic matters, and indeed, global trade, as well as growth topics, will be equally significant in the presser  - coming up.

FOMC statement:

TD Securities Global Rates, FX & Commodities Strategy offered a like for like Jan 30 FOMC statement:

GBP/USD levels

Commerzbank explained"While underpinned by the near term uptrend, it stays bid and we look for gains to the 55 week ma at 1.3297. Here we also find the July, September and October highs at 1.3258/1.3363. While we would allow for this to hold the initial test, there is scope for the June high at 1.3473 and the 200 week ma at 1.3650 slightly longer term."