It has been a reasonably quiet FX session, with the Dollar under modest pressure in the wake of yesterday’s Federal Reserve policy meeting. The Fed hiked rates 25bp, as expected, and lowered its expectations for 2019 to two rate hikes from three. This was seemingly not dovish enough to really hurt the Dollar but hawkish enough to weaken US equities.
Sterling has treaded water today despite much stronger-than-expected UK retail sales growth in November. The volume of retail sales rose a healthy 1.4% mom (versus a 0.3% mom consensus forecast). But with the British government and parliament prey to Brexit-related spasms and the Bank of England once again warning about the cost of the UK leaving the EU without a deal markets are seemingly struggling to get excited about Sterling.
The Swedish Krona was the outperformer today after the Riksbank surprised markets by hiking its policy rate to -0.25% from -0.50%.
