FX markets have seemingly already moved on from yesterday’s historic US-North Korea summit and global risk appetite is enjoying a bounce ahead of today’s Federal Reserve Policy meeting. The Kiwi Dollar and emerging market currencies are outperforming while the “safe-haven” Yen is again lagging. Sterling and the Euro are still lacking direction but if anything are under modest pressure. GBP/NZD is hovering around 1.895 which for much of the year has proved a floor for the cross.
The broad consensus forecast is that the Fed will hike rates 25bp today and the focus will be on the accompanying statement and in particular updated forecasts and press conference. The Dollar has enjoyed another lease of life in recent sessions and markets will be looking for clues as to whether the Fed would at least consider hiking rates two more times this year (after today’s meeting).
