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29 Jan 2014
European open: CBRT rate hike supports risk, Fed decision will dominate
FXstreet.com (London) - The Asian session saw another risk-on session, after the Central Bank of the Republic of Turkey went beyond expectations and hiked its overnight lending rate by 425 basis point to 12 percent, pulling hard on the reins of the runaway Turkish lira.
The aggressive move eased EM contagion worries and pushed further yen weakness on declining haven demand.
The Aussie dollar and the Kiwi dollar both declined earlier gains on risk-on momentum. The Kiwi dollar’s declines were also driven by tomorrow’s RBNZ meeting, and creeping concerns that the central bank will not set out plans for further rate increases this year, even if they do not announce a rate hike tomorrow.
Today’s M3 and private lending numbers are likely to follow the trend of recent months, triggering further concern over the state of business credit within the Eurozone.
Mark Carney is set to speak in Scotland this afternoon. His speech is going to be focussed on the outcomes for the pound should Scotland vote for independence later this year. He has already set out his stall with regards to the 7.0 percent unemployment threshold for rate hikes, meaning that his speech is unlikely to contain anything of great market interest.
In the US, all focus will be on the conclusion of the two-day FOMC meeting. It is expected that the Fed will not want to play around with the schedule of tapering and so announce a further reduction in its monthly asset purchase programme at 19:00 GMT.
The aggressive move eased EM contagion worries and pushed further yen weakness on declining haven demand.
The Aussie dollar and the Kiwi dollar both declined earlier gains on risk-on momentum. The Kiwi dollar’s declines were also driven by tomorrow’s RBNZ meeting, and creeping concerns that the central bank will not set out plans for further rate increases this year, even if they do not announce a rate hike tomorrow.
Today’s M3 and private lending numbers are likely to follow the trend of recent months, triggering further concern over the state of business credit within the Eurozone.
Mark Carney is set to speak in Scotland this afternoon. His speech is going to be focussed on the outcomes for the pound should Scotland vote for independence later this year. He has already set out his stall with regards to the 7.0 percent unemployment threshold for rate hikes, meaning that his speech is unlikely to contain anything of great market interest.
In the US, all focus will be on the conclusion of the two-day FOMC meeting. It is expected that the Fed will not want to play around with the schedule of tapering and so announce a further reduction in its monthly asset purchase programme at 19:00 GMT.