Good morning,
In comparison to the coin toss between an interest rate cut or hold in the UK, the Federal Bank in the USA has a decidedly easier time of things with regards to their rate decision today at 19:00 GMT.
Federal Chair Jerome Powell has had no major data release that will concern him: jobs numbers remain strong by aggregate and the US economy’s fundamentals haven’t dramatically changed since the last meeting in December 2019, with quarter by quarter growth projected to be up at 2.1% vs 2.0% in Q3. Although this does outline an impressive statistic, namely that the US economy is in its 11th consecutive year of expansion, 0.1% since last year is hardly the kind of increase that the Fed are likely to get carried away within the short term.
Although the likelihood of the US central bank holding rates is fully priced in, as always, one possible moment that could alter the course of the day is the live press conference starting at 19:30 GMT. Here, journalists will pepper the board with unprepared questions that can lead to hints and giveaways that allude to plans for the year ahead. If any unexpected announcements do crop up, USD pairs could start to move quickly in response.
On the other side of the Atlantic, the pound has been selling off against both the dollar and the euro as those in the market with less appetite for risk begin to close their positions. Sterling was down 0.40% on GBPEUR and 0.56% on GBPUSD just before close in London last night, with some limited moves today at market open. All bets are off and it’s still all to play for at tomorrow’s vote come midday.
We have written an article titled “Bank of England’s Super Thursday” that can be found here. Make no mistake, if you have a transfer in GBP open across tomorrow, it is possible that they will have changed in value by 12:00 GMT – either for better or worse. Give us a call to discuss the above with your account manager and plan your next steps.
Have a great day.
Author: Joshua Haden Jones, Senior Relationship Manager
Whilst every effort is made to ensure the information published here is accurate, you should confirm the latest exchange rates with WorldFirst prior to making a decision. The information published is general in nature only and does not consider your personal objectives, financial situation or particular needs. Full disclaimer available online.