Dollar falls post Fed

The Fed raised interest rates by 25bps yesterday (to a range of 0.75% to 1%) and indicated that a further two quarter point hikes is likely to be appropriate over the remainder of this year. Judging by its response following the meeting, the market expected the Fed to signal more than two, with the dollar weakening to over $1.07 against the euro and US 10-year bond yields falling by more than 10bps to under 2.5%

The result of the Dutch election is also providing support to the euro this morning, and has fuelled a fall in French and ‘peripheral’ bond yields and spreads. The Liberal Party is forecast to take the most seats in parliament and finish well ahead of the far-right Freedom Party

The unemployment rate in the UK dipped to 4.7% in the three months to January, its lowest level since 2005, though the annual rate of growth in earnings slowed again (to just over 2%)

The Bank of England’s MPC announces its latest interest rate decision today. It is expected keep rates unchanged at 0.25% and re-iterate its neutral policy stance (i.e. rates can be changed, in either direction, in response to changes in the economic outlook)

Data due today include CPI in the Euro area and housing starts and jobless claims in the US