The dollar has weakened overnight against its major crosses. The Fed held rates at 2.0% as we and the market expected however the accompanying comments sold dollar bulls a little short. The tone of the release was nowhere near the hawkish manifesto that some expected and as such the chance of a hike in August has dipped from 48% to 33%.

The Fed were not the only central bank to make headlines yesterday. Trichet was very hawkish in his testimony to a European Parliament committee yesterday signalling that we could see a Euro rate hike as early as next week. The Norwegian and Polish Central Banks both raised interest rates yesterday as inflation continues to hurt their respective economies.

Sterling was able to hold its own on the markets yesterday as a strong CBI distributive trends survey compounded the bullish sentiment that last week’s UK retail sales data allowed.

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 Please feel free to contact me (jeremy.cook@worldfirst.com) if you have any questions or thoughts regarding these updates or if you are interested in a particular event in the calendar. If you would like to discuss your foreign exchange requirements, please contact our:Corporate Foreign Exchange Team on 020 7801 9050 or our Private Client Currency Exchange Team on 020 7801 9080.   

Disclaimer: The above comments are only our views and should not be construed as advice. You should act using your own information and judgement. Although information has been obtained from and is based upon multiple sources the author believes to be reliable, we do not guarantee its accuracy and it may be incomplete or condensed. All opinions and estimates constitute the author’s own judgement as of the date of the briefing and are subject to change without notice.Any rates given are “interbank” i.e. for amounts of £5million and thus are not indicative of rates offered by World First for smaller amounts. E&OE. Definitions of jargon/market terms can be found in our Glossary of Foreign Exchange Terms.