Fed expected to increase interest rates later this week
Tuesday 2 May, 2023
Daily Currency UpdateToday, the Federal Reserve will commence its two-day gathering during which it is anticipated that they will increase interest rates by 25 basis points, signifying the swiftest cycle of rate hikes in the past four decades.
In the upcoming days, the spotlight will be on crucial central bank policy decisions, which will establish the tone for trading activities in May.
Key MoversThe ECB is still expected to lean towards a 25-basis points rate hike this week, contingent upon the Eurozone CPI data that will be released today. However, if the data comes in weaker than anticipated, it could reinforce the notion that inflationary pressures may recede in the latter half of the year.
As a result, it is likely that the euro will decline in the run-up to the ECB meeting on Thursday. Additionally, there were slightly unsatisfactory preliminary GDP figures for the Eurozone on Friday, mainly due to stagnant growth in Germany, which fell below expectations.
- GBP/USD: 1.2435 - 1.2505 ▼
- GBP/EUR: 1.1335 - 1.1415 ▲
- EUR/USD: 1.0945 - 1.0995 ▼