Today, the FOMC decision takes center stage. The Committee is expected to keep interest rates unchanged, so attention is likely to fall on the accompanying statement. In the UK, the manufacturing PMI slid yesterday, further reducing the chance for a BoE hike next week and giving another hit to the wounded pound.
USD-Bulls in the Driver’s Seat Ahead of the Fed Decision
The US dollar continued to gain against most of the other G10 currencies yesterday. It strengthened the most against GBP, SEK and NOK in that order. The British pound was the main loser as it took another hit following the slide in the UK manufacturing PMI (See below). The only currency that managed to resist the greenback’s strength was CAD, which ended the day virtually unchanged. The Loonie was on the back foot ahead of Canada’s GDP, and gained after the data showed that the economy expanded by more than anticipated in February.
Today, the spotlight is likely to fall on the FOMC policy decision. Expectations are for the Committee to keep interest rates unchanged, something supported by market pricing as well.
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