Fed keeps it calm, data takes the wheel

Yesterday's currency recap

CAD slipped after the Bank of Canada kept rates on hold and were neutral in the accompanying statement, warning that “elevated uncertainty” and ongoing economic slack should keep inflation pinned near target. Markets were expecting a more hawkish tone from the Bank. GBPCAD finished 0.3% higher.

EUR firmed as money markets shifted toward pricing an ECB hike in 2026.

The Fed cut rates by 25bps, as expected, but the big takeaway was what didn’t happen – no hawkish sting in the tail. Powell stressed that rates now sit at the top end of neutral and that policy adjustments will be taken “meeting by meeting,” with a clear nod to rising downside risks in the job market. He also emphasised that nothing is pre-decided for the next meeting. Bottom line: fully data-dependent, with jobs now the centre of gravity.

Today's GBP rates

Key data points

What we think

Today's US jobless claims land right in the crosshairs of a market that’s become hyper-sensitive to any job-market wobble. Claim numbers have been dropping over the last few weeks, which could lend to the argument that the job market is proving to be resilient. Both GBPUSD and EURUSD rose back to recent highs following the Fed meeting last night without being able to really follow through. Will be interesting to see a miss today is sufficient to drive through prior resistance levels.

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