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Markets ready for rate decision

1st November 2017 Market Update

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🇬🇧 GBP – Yesterday was a good day for the pound after Michel Barnier, the EU Brexit chief, said he is ready to speed up Brexit talks. The pound spiked up against major currency pairs and has held those levels coming in this morning.

This morning house prices were released slightly higher than expected, though likely to be overlooked with the interest rate decision due tomorrow from the Bank of England.

🇪🇺 EUR – The euro had a bit of a seesaw of a day, the unemployment figure beat estimates, as did GDP. Inflation was lower than expected, which markets were prepared for following Draghi’s comments last week. The euro lost some ground against the pound and following moves up and down versus the dollar the pair remained at similar to open levels.

No data is due to be released from Europe today.

🇺🇸 USD – Consumer confidence reached its highest level since March however this had little affect with attentions focused on today’s Fed meeting.

Manufacturing data will be released this afternoon and a slight drop is expected but likely to be overshadowed. The Fed interest rate decision will likely be a none event with no rate change expected, though this meeting is the last one before a new Fed chair is announced, traders will be looking at indications of a rate hike in December.

 

Key Announcements

🇺🇸 USD
14:00pm – ISM Manufacturing – expected to drop from 60.8 to 59
18:00pm – Fed interest rate decision – expected to remain at 1.25%, FOMC Statement

 

Our View: Again the focus is on interest rates, if the Fed provide any good guidance or raise rates today the dollar will likely strengthen. Similarly if the UK raise rates tomorrow the pound should strengthen. In Europe there is little in the way of data so if everything goes as expected the euro looks set for a period of weakness.

 

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Darren Kilner

Darren Kilner

Darren is Head of Dealing at FairFX. Darren lives and breaths FX, his Mastermind topics are G8 currencies and economic forecasts.

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