The Federal Reserve slowed the pace of hikes as expected, raising rates by 50bps in last night's meeting.
Markets await todays BoE and ECB rate decisions.
December 15, 2022
GBP/USD 1.2329 GBP/EUR 1.1613 EUR/USD 1.0616 USD/CAD 1.3573 EUR/CHF 0.9843 EUR/SEK 10.9067 EUR/NOK 10.4170 EUR/DKK 7.4391 USD/ILS 3.4326 AUD/USD 0.6775 NZD/USD 0.6377 USD/SGD 1.3558 USD/JPY 136.63 USD/CNH 6.9783 USD/INR 82.7500 EUR/ILS 3.6441 GBP/ILS 4.2274 USD/ZAR 17.3147
GBP investors will be paying close attention to the BOE meeting at midday. Markets are largely expecting another 50-basis point hike from the BoE to signal they are committed to bringing inflation under control – a smaller hike or negative commentary could prove negative for the pound.
GBPUSD trades up 0.86% this week. The FTSE opens on the backfoot down 0.77%.
Today UK nurses hold biggest strike in NHS history.EUREURUSD continues to trade above 1.0600 this morning, following a choppy day on Wednesday. The pair declined initially following the Fed rate decision, before rallying to reach a high just below 1.0700.
Focus shifts to today's ECB meeting where the central bank are expected to raise rates by 50bps. The Swiss Franc slipped against the Euro is morning as to SNB raised rates by 50bps.
Equities slumped amid central bank activity, with the Stoxx Europe 600 declining 1.2%, with all sectors posting losses.USD
As expected, the Fed slowed the pace of its hikes to 50 bps to a 4.25%-4.5% range however they revised the dot plot to show the 2023 projected peak rate to 5.1% and Powell stated there wont be any cuts until the Fed is confident inflation is moving towards the 2% target.
The USD saw a kneejerk reaction initially rallying before retreating to levels before the print. DXY traded down 0.8% this week. US equities declined.ASIA/PACIFICAsian markets pushed lower spurred by a hawkish Fed, with the thai baht leading emerging market declines.
Bond yields in New Zealand rose after Q3 GDP doubled the expected figure, with the rate on 10-year debt climbing 15bps.
China’s yuan dropped as a surge in Covid cases led to a soft data release. Tech shares in Hong Kong led a selloff in Asia, with the APAC index dropping 1.4%.ILSThe shekel has weakened this morning against the Euro and Dollar following yesterdays Fed rate hike. USDILS is up 0.7% on yesterday, trading just below 3.44 at time of writing.Data & EventsEuro Area - ECB Rate decision
UK - BoE Rate decision
US - Retail Sales
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