Fed hikes by 0.75% in biggest increase since 1994. BoE set to hike for fifth consecutive meeting.
June 16, 2022
GBP/USD 1.2089 GBP/EUR 1.1634 EUR/USD 1.0392 USD/CAD 1.2928 EUR/CHF 1.0214 EUR/SEK 10.6919 EUR/NOK 10.4494 EUR/DKK 7.4384 USD/ILS 3.4592 AUD/USD 0.6975 NZD/USD 0.6257 USD/SGD 1.3899 USD/JPY 133.68 USD/CNH 6.7256 USD/INR 78.0863 EUR/ILS 3.5943 GBP/ILS 4.1818 USD/ZAR 15.9317
The Bank of England is set to hike rates by 0.25% for the fifth consecutive meeting. Three members are expected to back a 0.5% hike. Concern is building around rates, some analysts have highlighted the risks of the BoE hiking too much, given the prevailing weak economic data from the UK.
The PM’s ethics advisor resigned yesterday, after suggesting that Johnson broke the ministerial code. This follows a week which has seen emphasis placed on the government’s two most divisive issues, the Rwandan deportation flights, and the Northern Ireland Protocol.
GBPUSD trades -0.77% lower, below 1.21. The FTSE100 has opened lower by -1.45%.EUR
The ECB held an emergency meeting yesterday, to discuss how quantitative tightening could impact borrowing costs in the bloc’s most indebted currencies. It introduced a new anti-fragmentation tool, which can be used to aid struggling members.
EURUSD trades down -0.52%, and the Euro Stoxx has opened -1.67% lower.USD
The Fed raised rates by 0.75% in the biggest increase since 1994 and signalled that it intends to tighten aggressively. The Fed has been spurred into action following last week’s CPI shock and the FOMC has projected a benchmark rate of around 3.4% by year-end.
Powell reaffirmed his believe that a soft landing is possible, however he did stress that it could be ‘difficult’. Officials have signalled that they expect inflation to be tamed by the end of next year.ASIA/PACIFIC
The BOJ has begun its two-day meeting where it is not expected to change rates, it could however tweak the range for 10-year yields.
New Zealand’ economy unexpectedly contracted in the first quarter, with GDP falling 0.2% from the previous three months.ILSUSDILS trades 0.7% higher, following a slip in the later hours of yesterday’s session.Data & Events
BoE rate decision
Switzerland rate decision
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