The Dollar weakens and stocks gain as the Federal Reserve raised rates by 75bps and eluded to further hikes before eventually slowing the pace; S&P lower Italy's sovereign debt ranking; European gas prices continue to surge.
July 28, 2022
GBP/USD 1.2183 GBP/EUR 1.1931 EUR/USD 1.0209 USD/CAD 1.2806 EUR/CHF 0.9793 EUR/SEK 10.4225 EUR/NOK 9.9062 EUR/DKK 7.4439 USD/ILS 3.4132 AUD/USD 0.6997 NZD/USD 0.6286 USD/SGD 1.3811 USD/JPY 135.56 USD/CNH 6.7449 USD/INR 79.8225 EUR/ILS 3.4835 GBP/ILS 4.1538 USD/ZAR 16.7091
New reports suggest UK energy bills are expected to surge to an average of £500 a month in January, adding pressure on the government to take action. In a bid to become next UK PM, Rishi Sunak has vowed to cut VAT from energy bills if he wins, whilst Liz Truss has said that green levies will be removed. Each proposal would cut less than £200 from the average annual gas and electric bill.
UK markets gained following last night’s Federal Reserve decision, with GBPUSD up 1.2% this morning and the FTSE up 0.55%.EUR
Italy’s sovereign debt ranking has been lowered by S&P, following the resignation of Mario Draghi and calls for a new election amid economic uncertainty across Europe. New reports show Eurozone GDP is forecast to print at 0.1% next quarter, deteriorating sharply from the previous three months as the worsening energy crisis takes hold of consumers. Gas prices climbed another 12% yesterday, in addition to the more than a third increase so far this week.USD
The Federal Reserve announced a 75bp rate hike in last nights meeting, increasing the benchmark rate to a range of 2.25% - 2.5%. Jerome Powell cited more rate hikes are on the horizon as the central bank attempts to curb inflation, however the pace of tightening will slow at some point and policy will be very much data driven, given recent recessionary concerns. Stocks gained whilst the dollar fell as markets digested the statement. The DXY is trading 1% lower this morning.ASIA/PACIFIC
The Aussie dollar has rallied 0.3% against the dollar as iron ore rallies following the Fed decision. Under new plans, the Peoples Bank of China are set to issue low-interest loans to refinance stalled property developments, in attempt to revive the sector.ILSUSDILS is trading 0.85% lower this morning following last nights rate decision, printing at 3.4150 at time of writing.Data & EventsEuro Zone - Consumer Confidence
US - GDP
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