us federal reserve

Dollar Rate Rise is a Damp Squib

27th September 2018 Market Update

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?? GBP – The Pound rose for the third consecutive day following positive comments that a deal would be reached, and a deal could be in place by the end of October, from both the Brexit Secretary Dominic Raab and Angela Merkel.

Jeremy Corbyn has told Theresa May that Labour MPs will vote against her Chequers plan unless she accepts his proposal to keep the UK in the customs union and protect consumer standards and workers’ rights.

May also spoke at the Bloomberg global business forum yesterday and vowed to slash corporation tax in the UK to the lowest in the G20 after Brexit.

Mark Carney is due to speak at 3pm this afternoon.

?? EUR – There was no data to note from Europe yesterday.

German preliminary inflation is due later this morning and is expected marginally higher than a month ago. Mario Draghi is expected to speak this afternoon.

?? USD – The Fed raised interest rates in the US for the third time this year. This was heavily priced in though as the Dollar remained fairly flat. There is a forecast of another rate rise in December and a further three in 2019.

Second quarter economic growth will be released this afternoon and is expected to remain at the same level, durable goods are also due out which are expected higher. Whilst initial jobless claims are expected to increase.

 

Summary: 
The Fed raised interest rates as expected and forecasted three further hikes in 2019. This was heavily priced in though, as the Dollar remained fairly flat.
 
The Pound rose for the third consecutive day following positive comments that a deal would be reached.

 

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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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