Yesterday, the Federal Reserve chose to keep the federal funds rate at a 23-year high of 5.25-5.5% for the eighth consecutive meeting.
This morning, the US dollar has gained 0.3% against the pound and made marginal gains against the euro.
Despite slipping around a quarter of a per cent against the euro yesterday, sterling ended Wednesday pretty much where it started, and heads into August around 0.4% lower than this time last month.
The eurozone inflation rate edged up unexpectedly in July to 2.6% from 2.5%. Investors had expected a decline to 2.4%, which would’ve inched closer to the European Central Bank’s 2.0% target.
The Bank of Japan ended a stimulus era yesterday by raising interest rates to 0.25% in July from 0.1% in June. The board voted 7-2 in favour of the hike and governor, Kazuo Ueda said the move was the ‘largest [hike] since a 25-basis point increase in February 2007, which was the last major policy tightening before a long era of massive monetary stimulus aimed at reflating sluggish consumer demand.’
The share price of UK lender, Metro Bank added more than 30% yesterday after hinting that it expects to return to profit this year.
At midday today, the Bank of England is anticipated to lower interest rates by 25 basis points to 5.0%, a rate not seen since August 2023.
Later this evening, the latest US manufacturing PMI from ISM is forecast to fall ever-so-slightly to 48.2 in July from 48.5 in June. This indicates another month of declines, as figures under 50 so indicate.
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