15/06/2017 - US Hikes Rates

USD

Last night the Dollar strengthened after the US Federal Reserve raised its headline interest rate by 0.25 per cent.
 
As widely expected Janet Yellen announced plans to raise the target range for the federal funds rate to between one and 1.25 per cent. In the run up to the decision markets priced in a near 100% chance of a hike.
 
The Federal Reserve expect that economic conditions will evolve in a manner that will warrant gradual increases in the federal funds rate, after their fourth upwards move in the federal funds rate since before the financial crisis.
 
Economists highlighted the significance of plans to implement a "normalization program" later this year. Such a strategy will see a reduction in the US central bank's quantitative easing programme.

GBP

The Pound fell early on during yesterday’s session after official figures revealed the amount of money workers are taking home continues to fall as inflation takes its toll.

In comparison with the three months to April last year average earnings fell in real terms by 0.6%. Before inflation, earnings rose by 1.7% excluding bonuses and were up 2.1% including bonuses. The news wasn’t all bad as unemployment fell by 50,000 to 1.53 million, the lowest since records began in 1975.

Key Announcements 

09:30 – GBP – Retail sales is expected to fall to -0.9%

12:00 – GBP – MPC Official Bank Rate Votes

12:00 – GBP - Monetary Policy Summary

12:00 – GBP - Official Bank Rate

13:30 – USD - Unemployment Claims is forecast to decrease to 241k

21:00 – GBP - BOE Gov Carney Speaks