The Federal Reserve maintained the US interest rate corridor steady at 1.50% – 1.75% yesterday, as markets took mixed messages from the announcement. On the one hand, the Fed is pleased with the current pace of economic growth and job creation. But, on the other, they’re concerned with the lack of domestic inflationary pressure and external negative developments. The greenback remained unphased by yesterday’s event with GBPUSD and EURUSD trading around the $1.30 and $1.10 levels, respectively.
Focus now shifts back across the pond to the UK where it’s the turn of the Bank of England to deliver a policy announcement. This is Mark Carney’s last announcement as governor. The question on everyone’s mind is whether or not he’ll leave the economy with a departing gift interest rate cut or attempt to afford the Bank a little more time to analyse last month’s election impact on business and the consumer.
The announcement is as 12.00 with the press conference following at 12.30. The pound could well see some volatility across this hour as we finally find out exactly what the central bank has chosen to do. A rate cut is likely to see sterling lower while a hold would likely see the opposite. Neither is guaranteed though.
Written by Viv Savani. 8:35am, January 30th 2020
The details expressed in this market report are for information purposes only and are not intended as a solicitation for funds or a recommendation to trade. Cornhill International Payments limited accepts no liability whatsoever for any loss or damages suffered through any act or omission taken as a result of reading or interpreting any of the above information.