The Dollar is yet again on the defensive as it continues posting new lows versus all currencies. The downfall started after last weeks Fed rate increase, mostly due to the fact that the Fed expressed some cautious optimism going forward. This has disappointed investors who were looking for 4 rate hikes this year as the risk of just 3 is now very likely. 

The EUR/USD gained 0.5%% so far, reaching highs of 1.0798 from 1.0735 lows, as the sentiment surrounding the French elections is leaning towards a pro-Europe candidate, easing concerns over a potential France exit from the European Union (EU) – Frexit.

GBP/USD edged down slightly to $1.2338, but remained well shy of its Monday high of $1.2436, its highest since Feb. 28. The GBP/USD fell after Prime Minister Theresa May’s statement that she will trigger Britain’s separation proceedings with the European Union on March 29, launching two years of Brexit negotiations.

Gold pushed to a two week high of $1235 as investor sentiment continued to improve after the FOMC meeting last week. Losses in equity markets and rising political uncertainty ahead of the French elections have also been supporting prices. The metal has been under pressure today as the French election polls indicate a small probability of any unwanted surprises.

Wall Street stocks declined as market participants worried that President Donald Trump’s plan to reduce taxes and bolster the US economy could take longer than expected.

A couple of speeches from Fed’s Dudley in the UK and BoE’s Carney will be key today. Also in the UK, we will have the release of inflation data which the market will pay attention to.