Markets await Federal Reserve interest rate decision
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Daily Currency Update
This evening sees the latest interest rate decision from the US Federal Reserve with no change in policy expected. Fed Chairman Jay Powell, is expected to highlight that the new administrations' tariff policy could lead to rising inflation later this year, so cutting rates in this uncertain time is too risky. This stance is at odds with Donald Trump who has been pushing for the Fed to cut rates so we could see a Trump backlash this evening on the back of the decision. Trump's recent attack on the Fed Chairman over the Easter weekend led to EUR/USD hitting its highest level in over three years as investors were rattled by the prospect of the politically neutral governor being forced from office. EUR/USD is currently around 1.1350.Key Movers
The pound gained across the board yesterday as news broke that the UK had signed a trade agreement with India, the world's fifth largest economy. Although not a big export market for UK goods compared to the EU or US, the amount of trade is expected to double over the next five years as a result. The pound likely benefitted from the prospect of positive news of any kind re: a trade at a time when the UK and US are locked in talks to try and reduce some of the recent levies implemented by Donald Trump. GBP/USD came close to 1.34 yesterday before retracing back to 1.3345 this morning.Expected Ranges
- GBP/USD: 1.3290 - 1.3445 ▲
- GBP/EUR: 1.1680 - 1.1820 ▲
- GBP/AUD: 2.0540 - 2.0720 ▼
- EUR/USD: 1.1255 - 1.1480 ▲