The FED increased it's base rate by the expected 0.25% to 5.25%. This caused a very brief burst of volatility in GBP/USD rates before normality kicked back in and the Pound continued to strengthen versus the Dollar. A bit of ground has been given up this morning versus the Greenback, but overall the short term trend remains in play.
Today it's most likely to be GBP/EUR under the spotlight. Alongside purchasing managers indices in both Europe and the UK the big one will be the ECB interest rate decision just after lunch. Economists are expecting a 0.25% hike to 3.75%.
At the same time as the rate decision there's the ECB policy statement, but eyes will naturally close in on the ECB press conference 30 minutes later. Normally speaking this is when the higher period of volatility starts....unless the ECB doesn't hike rates.
Sandwiched between the two are the initial jobless claims numbers in the US.
Later on there's a speech by the President of the ECB, Christine Lagarde. It could be a bouncy day for the Euro.
Business news continues to look at bumper profits in the oil industry. Shell announced first quarter profits of £7.6 billion. Expect the usual backlash during the course of the day.
EUR: 09:00 Services PMI
UK: 09:30 Services PMI
EUR: 13:15 ECB Interest Rate Decision
US: 13:30 Initial Jobless Claims
EUR: 13:45 ECB Press Conference
EUR: 15:15 ECB's Christine Lagarde Speech
As ever we look forward to keeping you in the loop and look out for our next update.
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