Daily Update - 14th December 2017
The American dollar started the day with the wrong footing and ended it even worse, down at the beginning of the day against its major rivals during the Asian session, amid retreating equities and yields, on a cautious mood ahead of Fed's monetary policy decision. Euro Strengthened against dollar on Wednesday after Federal Reserve raised interest rates in a widely expected move, but left its rate outlook for the coming years unchanged. Officials acknowledged in their latest forecasts that the economy had gained steam in 2017 by raising their economic growth forecasts and lowering the expected unemployment rate for the coming years. The Fed projected three more hikes in each of 2018 and 2019 before a long-run level of 2.8 percent is reached. That is unchanged from the last round of forecasts in September. Sterling rose against the dollar on Wednesday ahead of Bank of England policy meeting, which will be closely watched for clues on the future path of UK monetary policy. Bank of England is widely expected to keep interest rates on hold at 0.5 percent on Thursday, after rising rates for the time since 2007 last month, there are questions over whether rates will be hiked again next year and if so, at what pace. The Bank said in November that inflation was near its peak and would then fall slowly over the next three years to just above 2 percent. It also said a long-awaited pick-up in wage growth was likely next year, but inflation data released on Tuesday exceeded expectation. This Thursday, the macroeconomic calendar will be also a busy one, with preliminary December Markit PMIs, and the ECB monetary policy meeting. The central bank is largely expected to remain on hold, and will have little to add after its latest announcement of extending QE for a reduced amount. Later in the day, US retail sales will add to market's volatility. Yesterday’s Market
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