Federal Reserve due to cut interest rates
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Daily Currency Update
Tonight at 7pm (GMT) we get this month’s key event: the latest interest rate decision from the US Federal Reserve. The Fed is widely expected to cut rates from 4% to 3.75%, so the real focus will be on the guidance for future policy moves.With very little economic data available in recent months due to the government shutdown, it’s likely that Fed Chair Jay Powell will signal that the FOMC is taking a “wait-and-see” approach until more information becomes available.
Next week brings a wave of backdated releases, including November’s jobs report, retail sales and inflation data. As a result, the 28 January meeting may be the point at which any significant policy changes are confirmed.
GBP/USD is trading around 1.3320 with no UK data due today, while EUR/USD is near 1.1650.
Key Movers
Away from the Fed decision, European Central Bank President Christine Lagarde is scheduled to speak in London this morning on the future of the euro and the dollar. Meanwhile, EU officials are pushing to accelerate plans to seize frozen Russian assets and redirect them to support Ukraine’s war effort. If approved, the impact on the euro will be closely watched, given the unprecedented nature of the proposal and ongoing resistance from member states such as Belgium and Hungary.Expected Ranges
- GBP/USD: 1.3240 - 1.3440 ▲
- GBP/EUR: 1.1380 - 1.1480 ▲
- GBP/AUD: 1.9960 - 2.0200 ▲
- EUR/USD: 1.1560 - 1.1725 ▲