TGIF:
This week has closed with a bang. A Federal Open Market Committee decision last night, more Brexit news than you can shake a stick at and a Euro that just can’t make up its mind all added to the confusion. This morning, DUP leader Arlene Foster kicked Sterling markets into a spiral with the Pound soon trading below 1.30 against the Dollar. Pushing the losses within cable to a little over 1.5 percent in 48 hours, the leader of the Northern Irish party said that May could not count on her party’s support on the incumbent Brexit deal. The Northern Irish politician slammed May’s Brexit plan, as a move against the Union and a danger to the stability of the United Kingdom. The move was less pronounced against an already subdued Euro, allowing EURGBP to continue its descent through 0.87. The Fed’s interest rate decision last night left the US Dollar virtually unchanged. Ahead of the event, futures markets attached an 80% probability of a 25-basis point interest rate hike at their December meeting. Following the event, the situation and market expectations remained almost entirely unchanged. Unsurprisingly, therefore, treasury yields were little changed with the US and Asian session last night leaving the value of the US Dollar unchanged. At market open in Europe this morning, there was a different story, with the greenback closing some 0.4% stronger than its rate at market open this morning. Moving into the weekend, any development on Brexit will continue to determine the Pound’s value.
Discussion and Analysis by Charles Porter
Onto June A slew of strong US economic data over recent weeks had boosted expectations for how the culmination of the Fed’s two-day meeting would be presented to the public last night. The story goes back further. The narrative dominant in late-2023 of a US economy in need of restrictive monetary policy was unavoidable. The […]
Germany and the EU The Germany Supply Chain Act came into force in 2023 as a result of Germans wanting to do something good for employees in other countries in particular with respect to human rights and environmental issues. So far so good. But a combination of cost and bureaucracy overlaid with the difficulty of […]
Emergency Stop In the early hours of trading on Monday morning, sudden and significant buying pressure within USDJPY has markets wondering: is this the signal that local authorities are taking another stab at active market intervention? In a critical week for FX, with central bank decisions and a slew of top-level economic data from across […]