Markets Await Fed Decision, Guidance

With little out on the calendar yesterday, the pound ticked up from Friday’s lows as the euro pulled back from new highs. Sterling-euro briefly retested 1.1200 and sterling-dollarregained 1.3000. Euro-dollar continued to hold above 1.1600.

Previous Day's Market Highlights

With little out on the calendar yesterday, the pound ticked up from Friday’s lows as the euro pulled back from new highs. Sterling-euro briefly retested 1.1200 and sterling-dollarregained 1.3000. Euro-dollar continued to hold above 1.1600.
 
The IMF downgraded its forecasts for UK economic growth to 1.7% from 2.0%. Preliminary Eurozone Manufacturing and Services PMIs surprised to the downside, providing the eurowith little support.
 
US data were mixed as Manufacturing PMI rose more than forecast, while Services PMI met expectations and Existing Home Sales slowed. 

Today's Market Highlights

The US releases additional housing data as well as Consumer Confidence (14:00, 15:00 BST), which markets will keep an eye on ahead of tomorrow’s Fed rate decision. The two-day meeting begins today.
 
While no interest rate changes are expected, traders will pay close attention to any forward guidance or change in tone, particularly if softer inflation looks like it may be weighing on the Fed’s expectations for a third hike this year. If it does, the dollar could weaken.  
 
MPC Member Andy Haldane, who has typically been one of the more dovish members but last month struck a more hawkish tone, speaks this evening (18:00 BST) on the international monetary and financial system. Any hawkish comments could strengthen the pound. 

Today's Economic Calendar

Time Currency Release Consensus Previous
11:00 GBP CBI Industrial Trends Survey - Orders MoM (Jul) 12 16
14:00 USD S&P/Case-Shiller Home Price Indices YoY (May) 5.8% 5.7%
14:00 USD Housing Price Index MoM (May) 0.5% 0.7%
15:00 USD Richmond Fed Manufacturing Index (Jul) 7 7
15:00 USD Consumer Confidence 116 118.9
18:00 USD MPC Member Haldane Speaks
23:45 NZD Trade Balance YoY (Jun) $-3.68B $-3.75B
02:30 AUD Consumer Price Index YoY (Q2) 2.2% 2.1%
02:30 AUD RBA Trimmed Mean CPI YoY (Q2) 1.8% 1.9%
04:05 AUD RBA Governor Lowe Speaks