Federal Reserve made no changes to interest rates while the statement continued to indicate further rate increases.

Federal Reserve made no changes to interest rates while the statement continued to indicate further rate increases

The Federal Reserve made no changes to interest rates while the statement continued to indicate further rate increases with hawkish rhetoric on the labour market.

The dollar gained significant ground given no retreat from a December hike with fresh doubts surrounding the Euro also contributing to US currency gains as Sterling optimism faded slightly.

Oil prices weakened further amid on-going liquidation with Brent at 4-month lows.

Commodity currencies weakened, and the Canadian dollar was also hit by fresh concerns over US trade relations.

Gold and silver were also undermined by dollar strength and dipped to 1-week lows.

The pace of Brexit rumours and briefings eased somewhat during Thursday. Sources continued to suggest the potential for a Cabinet meeting on Monday. According to sources, the UK government would have to accept a backstop with no escape clause or any future trade deal would demand lasting Customs Union membership. There were reports that Brexit Secretary Raab would meet EU Chief Negotiator Barnier on Tuesday with the full withdrawal agreement released on Wednesday.

Sterling drifted weaker in the European session with a GBP/USD retreat to 1.3100 as the EUR/GBP rallied to near 1.1500.

Government sources dampened expectations of an imminent deal and net optimism over a deal faded slightly as Irish tensions persisted. EUR/GBP was, however, still unable to hold gains and traded at 5-month highs above 1.1500.

GBP/USD dipped to below 1.3050 given the strong dollar with further UK losses on Friday. Markets were braced for further choppy trading on Friday given positioning ahead of the weekend and the latest UK GDP data.

Economic Calendar

Expected Previous
09:30 GBP United Kingdom GDP (Q/Q) 0.60% 0.40%
09:30 GBP UK Trade Balance -11.25B 2.25%
09:30 GBP United Kingdom GDP (Y/Y) 215K 214K
15:00 USD Michigan Consumer Sentiment 100.4 98.6

*All rates shown are indicative of interbank rates and should only be used for indication purposes only. It is important to note that foreign exchange rates fluctuate and that rates may vary depending on the amount and the base currency that is purchased or sold. Rates are correct as of 8:00am UK time. CentralFX are not responsible for the rates shown.