In forex today, the US Federal Reserve came in with a 25 basis point hike to the Federal Funds Rate, as expected, bringing the rate to 2.25%. The Fed’s current dot plot of rate hike expectations also shows another rate hike likely in December, also as expected, with three more rate hikes to come in 2019 and at least one more in 2020, and the Fed is continuing to stay the course closely in-line with broader market expectations.
Fed’s Wednesday showing gives way to US Thursday data docket
Thursday is once again all about the Greenback, with final annualized US GDP readings on the offering, alongside US personal consumption measures and a speech expected later in the day from the Fed’s chair, Jerome Powell, who is expected to continue striking a hawkishly-hopeful tone.
major currency pairs based in US Dollars stuck closely to their middle grounds, with the Euro and the Sterling both remaining comfortably within their week’s ranges, though the Canadian Loonie suffered a little more than the rest, with confidence in the CAD continuing to be shaken by NAFTA renegotiations that keep spiraling out of control, and odds of a messy dissolution of the current NAFTA agreement are on the rise as the US actively pursues separate bilateral agreements with both Mexico and Canada.
EUR/USD: Focus on today’s close, vulnerable to hawkish interpretation of Fed policy
With US data keeping a firm grip on the steering wheel, EUR figures are expected to see only mild impact on the forex market’s largest pairing, though the early European trading session is seeing a bout of short-selling at the opening bells, and preliminary German CPI due at 12:00 GMT could throw a wrench in the works if the annualized figures for September miss the market’s forecast of 2.0%, a mild uptick from the previous month’s reading of 1.9%.
GBP/USD back into familiar levels as Brexit hangs over the Sterling
Cautious Pound traders found little reason to push the Cable into new territory following the US Fed’s as-expected rate hike, and the pair continues to trade near the midrange of the GBP/USD’s two-week range. Brexit continues to hang over hopeful GBP bulls, with little resolutions being seen as all sides scramble to come up with a solution that makes everybody happy, except for Eurosceptic Brexiteers within the UK’s own parliament, who seem intent on tipping over negotiations at any cost and forcing a hard-Brexit scenario.
Key notes from the Asian session
UK PM May is losing Brexit support – UK Times
French President Macron would welcome the UK back into the EU – Bloomberg
New Zealand farmer confidence turns negative for the first time since early 2016
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