Markets Cautious Ahead of Fed Policy Decision
UK CBI industrial orders printed unchanged, but the survey revealed shortages of skilled labour were hampering companies production plans and the strongest increase in domestic prices since 1980 with more expected over the next few months, reinforcing inflation concerns within the Bank of England.
Sterling found support below 1.3450 to the dollar before rallying just above 1.3500 as equities markets recovered, while the Euro retreated to 1.1950.
Volatility eased on Wednesday with caution ahead of the Federal Reserve policy decision. Markets expect the Fed will signal a rate hike for March with the rhetoric watched very closely. The dollar was little changed in early Europe with the Euro fractionally close to 1.1300 amid expectations of a hawkish Fed stance.
Markets were continuing to monitor UK political developments following Cressida Dick’s announcement of a Police investigation into allegations surrounding social events at Downing Street. Nevertheless, overall risk conditions continued to dominate market trading.