DAILY FX WRAP: Markets have been tentative ahead of tonight's FOMC rate decision, with the exception of SEK and GBP
Ahead of this evenings FOMC rate decision, FX markets had been relatively tentative with the exception of both GBP and SEK following the release of the BoE minutes alongside the UK employment report, which subsequently saw GBP/USD fall to fresh 5y lows with the BoE minutes signalling that the strength of GBP could cause inflation to be lower for longer. Additionally, weakness in GBP was also attributed to the lacklustre UK wage data (1.8% vs. Exp. 2.2%). The UK budget statement provided no surprises as the OBR upgraded their UK GDP growth forecast for 2015 and 2016 whilst also cutting their inflation outlook for this year citing the slide in oil prices as expected. Meanwhile, in the lead up to the FOMC the USD-index fluctuated from gains and losses and struggled to find any direction with market participants sitting on the sidelines ahead of the key risk meeting.
Elsewhere, in an unscheduled move, the Riksbank cut its repo rate to -0.25% from -0.10% and expanded their QE programme to SEK 30bln which saw USD/SEK decline to its lowest level since March 2009. The central bank also warned of further cuts in the future if required.
Looking ahead, tonight sees the FOMC rate decision with the some expecting the FOMC to finally drop patient from their statement which will show the FOMC are diverging from the majority of other global central banks and may bring forward expectations of a rate hike.
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Daily Forex Wrap: Markets Tentative Ahead Of FOMC Decision
Published 03/18/2015, 12:14 PM
Updated 07/09/2023, 06:31 AM
Daily Forex Wrap: Markets Tentative Ahead Of FOMC Decision
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