All eyes on the FOMC
Daily Currency Update
The main event in financial markets this week will be this evening’s Federal Reserve policy meeting. There should be no change in rates, but we expect the Fed to push back against market bets for imminent US policy easing.The FOMC faces a delicate balancing act this evening. While financial markets eagerly await rate cuts, the central bank must manage expectations without jeopardising its inflation fight. Look for nuanced language in the statement or Powell's remarks which may hint future easing while stressing the need for data-driven policy decisions.
After tonight’s Fed’s meeting investors will quickly turn their attention to Thursday’s Bank of England policy announcement. At its December meeting, the MPC continued to strike a hawkish note. The vote was again split 6-3 in favour of no change, with the statement keeping the line that further tightening may be possible should inflationary pressures persist.
Key Movers
Euro Area economy avoids technical recession, posting flat growth in Q4. Despite avoiding a technical recession, the Eurozone's flat Q4 growth and meager annual expansion paint a picture of an economy struggling under the weight of inflation and policy headwinds.Expected Ranges
- GBP/USD: 1.26666 - 1.27006 ▼
- GBP/EUR: 1.17038 - 1.17324 ▲
- GBP/AUD: 1.92398 - 1.93282 ▲
- EUR/USD: 1.08060 - 1.08481 ▼