All eyes shift to the BoE

Daily Currency Update

The Federal Reserve kept rates unchanged in last yesterday’s FOMC meeting, Fed Chair Jay Powell voiced that he is against the idea of a March rate cut during the press conference.

As far as the statement was concerned, the reference to possible additional rate hikes was diminished, while in its guidance the central bank stated that it does not expect it will be appropriate to cut rates until there is greater confidence inflation is moving sustainably towards 2%.
During the press conference, it was surprising that Powell mentioned a March rate cut was unlikely. Having seen the Fed diminish market expectations of a March rate cut, today we will receive the latest figures from the Bank of England, where the rate of UK inflation is slightly more elevated, although is still slowing sharply.

The December uplift in UK inflation to 4% serves to highlight the challenges facing the Bank of England in returning inflation to its 2% target.