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Federal Reserve cuts interest rates as expected

GBP - British Pound

Like clock work, late last night the Federal Reserve cut its interest rates by a further 25 basis points in line with market expectations. This was the second time this year that the Fed have cut their rates but as suggested earlier this week this was in the eyes of many investors a hawkish cut. Despite this however, the pound rallied against the US Dollar breaching GBP/USD 1.2500 for the second time this week with this move once again occurring outside of UK trading hours. The USD did manage to claw back some of its loses before settling as investors digested Powell's comments and importantly the dot plot which is the anonymous projection of where investors foresee interest rates moving forward with rates set to remain unchanged till the end of the year. Fed Chair Powell once again reiterated that he would be keeping an eye out for political and trade uncertainty.

In the UK, it was a case of two days down, one to go with the final day of proceedings at the Supreme Court. There were encouraging comments as well from DUP leader Arlene Foster, who said her party is prepared to consider solutions to the border from all sides. The Bank of England meet today to decide on UK interest rates but don't expect anything much.

Key Movers

It was a rough night for the antipodean currencies last night, the Australian Dollar and New Zealand dollar. First off the Kiwi weakened as its economy slowed to its lowest level in five years with manufacturing and exports both falling due to the slowdown in China, its largest export partner. It was a similar theme for the Aussie dollar as it dropped to two week lows against the US Dollar with unemployment levels ticking up. This is alarming for the Reserve Bank of Australia who earlier in the week said they'd expect employment growth to be mild.

Expected Ranges

GBP/USD: 1.2440 - 1.2520 ▼

GBP/EUR: 1.1280 - 1.1340 ▼

GBP/AUD: 1.8250 - 1.8400 ▲

GBP/NZD: 1.9690 - 1.9790 ▲