BoE follows the FED rate decision
Thursday 23 March, 2023
Daily Currency UpdateThe Federal Reserve bank raised the interest rate by 25 basis points as widely expected, taking it to 5% on the eighth hike in the past year. The forward guidance from the Fed forecast at least one more hike this year, with no intention of cutting interest rates in 2023. The annual GDP was revised lower with the banking turmoil likely to have an impact on growth. However, it was comments from Treasury Secretary Janet Yellen that most took away from the meeting as she stated that the government is not considering insuring all uninsured bank deposits, which was a revision on comments Tuesday that she was prepared to intervene to protect depositors in smaller banks. GBP/USD saw a knee-jerk reaction to the news, jumping above 1.2300, and has since climbed a little higher. EUR/USD also saw a jump on the news and touched 1.0925 earlier this morning.
Key MoversToday is another day of central bank decisions. The Swiss National Bank has already announced its latest interest rate decision and raised for a fourth consecutive quarter by 50 basis points. The rise was expected with only the only doubts coming from the recent and local banking crises, which saw UBS buyout the failing lender Credit Suisse. This will be followed by the Bank of England which meets later in today’s session, and is expected to follow the Fed’s lead with a 25-basis-point hike, especially after U.K. inflation unexpectedly rose back above 10% in February, from data showed on Wednesday. GBP/EUR has dipped from yesterday’s highs of 1.1400, opening closer to 1.1300 this morning.
- GBP/USD: 1.2190 - 1.2410 ▲
- GBP/EUR: 1.1280 - 1.1410 ▼
- GBP/AUD: 1.8190 - 1.8580 ▲
- EUR/USD: 1.0780 - 1.0950 ▲