The Federal Reserve hiked rates by basis points to yesterday which was as expected. The decision flew in the face of what Trump had been asking for, but then it really does have nothing to do with him. The markets were more focused on indications of future policy, with some suggesting that Powell would soften his language regarding 2019 hikes.
Powell did say that he expected two more rate hikes in 2019, but that these were not set in stone. The dollar weakened a little as a result, but stock markets around the world dipped. There is a fear that rate hikes will stop economic growth, rather than letting it naturally tail off. Of course, alongside this is Brexit uncertainty and trade war fears. 2019 could be even more eventful than this year.
Today we will see initial jobless claims up to 15 December 2018. The reading was hugely positive last time around so it is unlikely the reading will better that, but the unemployment market has been so strong for so long in the US, it is reasonable to expect another healthy reading. Tomorrow is an extremely busy day for economic data from the US, the highlight being durable goods orders for November.
For more on currencies and currency risk management strategies, please get in touch with your Smart Currency Business trader on 020 7898 0500 or your Private Client trader on 020 7898 0541.