The dollar slipped towards a 10-day low following the Federal Reserve’s comments on the rate of rate hikes over the coming year. Despite the bank raising interest rates for the fourth time this year growing concerns over the projected growth in the states next year caused investors to decrease their bets on the dollar and the greenback weakened against its major rivals. Although U.S. policymakers remarked that they expect to raise interest rates another three times by early 2020, this was at a slower pace than previously expected and investors caught wind of this. Cable traded in the mid 1.26’s while EURUSD pushed higher to trade in the mid 1.14’s.
The euro outperformed elsewhere as well, supported by news that Italy had struck a deal with the European Commission over its contested budget for 2019. The euro pushed sterling lower, down to 1.1065 as no-deal Brexit concerns were understandably on traders’ minds once again. The single currency rallied half a percent against the struggling pound, keeping the home currency supressed below the 1.11 mark.
Today’s key events
The main event today will be at midday when the Bank of England announces its latest decision on interest rates. The pound has pushed higher against the dollar this morning in anticipation of the meeting. With the worries surrounding Theresa May’s ability to win parliamentary support for her Brexit plan still front and centre however, the Bank of England’s Monetary Policy stance is almost certain to remain unchanged. Retail Sales figures arrived this morning, better than expected, but the pound showed little interest in the news.