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FOMC minutes in focus today

Daily Currency Update

Minutes from the latest FOMC meeting will be released on this evening, opening a window into the conversation that led Fed officials to decide on a 0.25% hike in the federal funds rate earlier this month.

The FOMC is the body in charge of deciding the federal funds rate, which has a direct impact on interest rates and is the Fed's main tool for correcting the course of inflation.

In their last meeting, the FOMC's 12 members decided to dial down the rate of hikes for the second time in a row, to 0.25% after a previous hike of 0.5% which was preceded by four consecutive hikes of 0.75%. The current rate stands between 4.5% and 4.75%.

Key Movers

The pound extended gains against the US dollar yesterday, rising 0.56% after data showed an unexpected bounce in British business activity, suggesting a smaller risk of recession.

The UK private sector businesses increased for the first time in 7 months. The upturn in the service sector contrasted with a marginal reduction in the manufacturing sector as service providers saw export sales rise for a 3rd consecutive month. The data does bode well for the prospects of a shallow recession with the data releases to come likely to hold the key for GBP.

Expected Ranges

  • GBP/USD: 1.2015 - 1.2095 ▼
  • GBP/EUR: 1.1305 - 1.1365 ▼
  • EUR/USD: 1.0605 - 1.0675 ▼