Fed to hike again

The euro and sterling have both lost ground against the dollar ahead of the Fed’s latest monetary policy decision later today, weakening to $0.99 and $1.13 respectively. This in turn leaves the single currency-pound exchange rate trading just above 87p

In government bond markets, US 10-year yields have risen to almost 3.55% ahead of the Fed announcement with equivalent UK and German 10-year yields increasing to 3.25% and 1.85% respectively

Equity markets remained under pressure yesterday with both US and European stocks closing around 1% lower on the day

The Fed concludes its monetary policy meeting today and looks set to announce a third consecutive 75 basis points increase in interest rates, taking them to a range of 3.0% to 3.25%

ECB President Christine Lagarde says the central bank will raise interest rates “by as much as necessary to reach our (2%) inflation target in the medium term”

Data due today includes existing home sales in the US