Fed raises rates as expected; All eyes on BoE today

Sentiment in Asia was mixed this morning but most of the major equity indices followed the US counterparts lower, with Shangai, HSI and the ASX200 in negative territory. On the other hand the Nikkei and the South Korean KOSPI managed some gains mostly on the back of mining and oil.

On Wednesday the Fed raised rates by 25 basis points in line with consensus expectations, the US central bank also added that it was expecting two more rate hikes this year and raised the growth forecasts for 2018 and 2019.

We are seeing a follow-through of USD selling, at least early into this morning. The US Dollar index (DXY), showing the strength of the USD against a basket of other currencies, is currently at 89.61 after Wednesday’s highs of 90.41.

The Fed’s indicated 3 raises throughout 2018, apparently disappointed those bulls aiming for four this year.

The British pound’s performance was rather mixed this morning ahead of the BoE rate decision today. GBP gained against the USD, CHF, CAD and the AUD but was a loser against the euro and the JPY.

Later today we have EZ PMIs, German IFO, UK retail sales and the highlight will go to the BoE rate decision later this afternoon.

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