All Eyes On FOMC Rate Decision

. 1 min read

The AUDUSD opens at 0.6747 (mid-rate) and the NZDUSD opens at 0.6521 (mid-rate) this morning.

This morning’s FOMC has been the main focus for investors over the past 24 hours and as such both currency and equity markets have traded tight ranges.

With the Federal Reserve widely expected to reiterate the current policy is “appropriate” it will be comments regarding the balance sheet and any decision by the Fed to increase the IOER that will grab the headlines. There is a growing expectation that the Fed will increase the Interest on Excess Reserves (IOER) by 5bps from 1.55% to 1.60%.

Earlier this morning the European Parliament overwhelmingly backed the terms of the UK's departure from the EU. Now begins an 11-month transition period in which the two sides hope to negotiate their future economic relationship. Trade talks are expected to begin in early March with the UK insisting talks should not be extended beyond 31 December 2020.

Global equity markets remain mixed - Dow +0.43%, S&P 500 +0.30%, FTSE +0.04%, DAX +0.16%, CAC +0.49%, Nikkei +0.71%, Shanghai -2.75%

Gold prices are unchanged trading at $1,569 an ounce. WTI Crude Oil prices are holding steady at 53.36 a barrel.

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