Dollar hits pause ahead of tomorrow’s US interest rate meeting

Market reports
Lawrence Kaplin
  • GBP: UK Shop price inflation falls
  • EUR: EU GDP data awaited
  • USD: All eyes on the Fed
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Currency markets continued to trade in a fairly tight range during yesterday’s trading session, as market participants await a slew of upcoming economic data. With no major data releases yesterday, the $ correlated closely to overall market sentiment. This improved dramatically late in the US session, after the US treasury announced a much lower borrowing requirement for Q1 2024. This sent US equities to new all-time highs and saw the $ ease moderately as “risk-on” currencies gained.


Market rates

*Daily move - against G10 rates at 7:30am, 30.01.24

** Indicative rates - interbank rates at 7:30am, 30.01.24

Table - 2024-01-30T084848.733

Data points

Table - 2024-01-30T084850.646


  • EUR: ECB Lane & Tuominen

Our thoughts

Markets largely brushed aside increasing Middle East tensions, instead choosing to focus on the upcoming tier 1 macro-economic data. Tomorrow’s US FOMC interest rate meeting will be closely watched for hints from Fed Chair Powell as to the timing and magnitude of interest rate cuts this year.

Today will see the ECB release their 1st estimate of Q4 2023 GDP, where the overall is economy is forecast to have contracted by 0.1%, which following a negative reading from the previous Quarter would mean the EU has entered into recession.

UK consumers received a rare piece of good news this morning as the British Retail Consortium reported shop price inflation fell to its lowest level in 18 months, rising 2.9% versus 4.3% in December. Sterling traders keenly await Thursday’s Bank of England interest rate setting meeting.

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