The dollar is weak this morning as the Federal Reserve cut interest rates yesterday for the third time this year. As expected, rates were cut by 25 basis points due to trade and growth fears. In a speech, Jerome Powell said that “we see the current stance of policy as likely to remain appropriate”, and suggested that he doesn’t expect there to be a rate cut again unless economic conditions worsen unexpectedly. Eight policy makers voted for the cut, whilst two opted for rates to remain the same.
US GDP data was released before the Fed’s announcement yesterday, showing the economy grew by an annualised 1.9% in the third quarter of 2019, beating market expectations of 1.6%. Household consumption, government spending and exports were the main drivers of growth. Business investment fell and imports contributed negatively.
Attention now turns to Non-Farm Payrolls, which are due to be released tomorrow.
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