Fed Keeps Policy Unchanged, BoE To Follow…
In global economic news, Evergrande, the Chinese property company that caused global concern earlier this week will be able to make an interest payment due today, and a cash injection into the financial system by the Chinese central bank has also eased some traders’ concerns.
Over in the US, at its FOMC meeting, the US Fed voted to keep monetary policy on hold – this was as expected. However, the meeting statement did remark that “it [quantitative easing tapering] may soon be warranted”. There was a hint from Chair Powell that tapering could start in November and be concluded by mid-2022 – the latest interest rate projections showed that this is the consensus of FOMC members.
As we start today, once again EUR/USD opens in the bottom half of $1.17-1.18 whilst GBP/EUR is changing hands just below the 1.1655 with GBP/USD having picked up slightly to operate at the midpoint of $1.36-1.37.
Datawise, the main highlight from a busy calendar ahead is the latest Bank of England monetary policy decision. However, similar to the US Federal reserve, no changes to policy are expected.