Jerome Powell emphasizes need for price stability as the FOMC vote to raise interest rates by 25bps. The Euro extends gains against the Dollar, as reports suggest significant progress on Russia/Ukraine peace talks.
March 17, 2022
GBP/USD 1.3182 GBP/EUR 1.1929 EUR/USD 1.1050 USD/CAD 1.2656 EUR/CHF 1.0394 EUR/SEK 10.4157 EUR/NOK 9.8241 EUR/DKK 7.4429 USD/ILS 3.2356 AUD/USD 0.7323 NZD/USD 0.6844 USD/SGD 1.3556 USD/JPY 118.67 USD/CNH 6.3603 USD/INR 75.80 EUR/ILS 3.5756 GBP/ILS 4.2650 USD/ZAR 14.9145
The Bank of England is expected to hike rates by a further quarter point today, returning interest rates back to their pre-covid level of 0.75%, in a bid to manage the worsening inflation outlook. The rate decision is due for release at 12:00 GMT.
Sterling recovered against the Dollar following the Federal Reserve decision, rebounding above the 1.3100 level. The pair jumped 0.8%, the biggest daily gain since last July and has continued to climb this morning, up a further 0.25% as we print.EUR
The Euro extended gains yesterday, climbing to one-week highs against the Dollar, as reports suggested Ukraine and Russia had made significant progress on peace talks including a ceasefire and Russian withdrawal in return for security guarantees. The pair has added a further 0.2% this morning.
European shares advanced, with the Stoxx 600 up 0.5% at open, with tech and basic resources leading gains. Investor focus shifts to todays inflation data and comments from Christine Lagarde.USD
The Federal reserve raised interest rates by 25bps in last nights meeting, the first of what is expected to be the most aggressive campaign of hikes since the mid-2000s. Powell highlighted the need for price stability, whilst playing down the risk of recession, emphasizing the strength of the economy. A sequence of rate hikes are forecast for 2022, ending the year at 1.9%.
Stocks gained on the Fed’s view of the robust economy, futures on the S&P 500 had the best two-day advance since 2020. The Nasdaq gained 3.7%. The Dollar is trading lower as possible progress on Russia/Ukraine peace talks boosted sentiment and the market digested rate hike expectations, the DXY is 0.8% lower on the week so far.ASIA/PACIFIC
Chinese technology shares surged following last night’s Federal Reserve meeting, the Hang Seng rose 5.9% whilst Shanghai’s composite index gained 1.4%.
Central bank divergence continues to impact the Yen, with the currency sliding 0.7% against the Dollar to hit six-year lows.
The Australian Dollar outperformed its G10 peers, gaining 0.3% as unemployment fell to the lowest level since 2008.ILSUSDILS has declined this morning, trading 0.46% lower below the 3.2400 level at time of writing.
Economists have reported their expectations for the Bank of Israel to raise interest rates by 0.5% in April, in a bid to manage rising inflation.Data & EventsEuro Area - Core Inflation
Christine Lagarde speaks
UK - BoE Interest Rate Decision
US - Building Permits
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