The forex value of the British pound strengthens against the US dollar after the Federal Reserve resolved to maintain the status quo of loose monetary policies. This decision resulted in lower expectations about the greenback. Maintaining the monetary policy at status quo would mean that the base interest rates will not be raised and the quantitative easing program will be continued until its completion this June. The government will push through purchasing market assets in an attempt to provide boost for the sagging market.

According to the latest minutes of the Federal Reserve’s policy meeting, all of the ten members of the monetary policy committee have unanimously approved the decision to maintain the current monetary policies. Nonetheless, there was no unanimity in terms of the details about the Federal Reserve’s monetary policy for the remaining months of the current year. Opinions were divided among the members. Some members recommended a much tighter monetary policy for the remainder of the year. This prompted some foreign exchange traders to speculate against the US dollar.

On the other hand, the members of the Federal Reserve’s monetary committee had achieved consensus on some key economic issues. They all agreed that the rate of US inflation is still within manageable range. The committee members also concurred that the economic recovery of the United States is on the right track. Many of those who are interested to make money through the forex market have interpreted the announcement of the Federal Reserve as a signal to sell their dollar-denominated holdings. Some analysts think that it is now unlikely that the Fed will soon change its dovish monetary policies considering the strengthening but still fragile economic situation of the Unite States.

As a result, some forex traders bet against the dollar but the sell off volume was only moderate. Nonetheless, it was enough to weaken the dollar compared to other major currencies, which included the British sterling.

Meanwhile the soaring prices of crude oil continue to influence the price movements in the currency markets. The US dollar is particularly affected because of its status as the main invoicing currency for the international trade of oil. The inverse correlation between oil prices and US dollar forex value meant that the continually increasing oil prices are exerting pressure against the dollar. Other currencies are being favoured by this situation. As long as market fears over the supply of oil linger, the global prices of fossil fuel will remain high.