Fed to taper ‘soon’

The euro briefly dipped below $1.17 against the dollar after the Fed’s latest monetary policy announcement but is trading just above this level this morning. Sterling is little changed against the US currency at around $1.3650, leaving the euro-pound exchange rate at just under 86p

In bond markets, US and German 10-year yields are marginally higher this morning at about 1.34% and -0.29% respectively, while European equities are ahead by almost 1% at the open today with US stocks closing with similar gains yesterday

The Fed left interest rates unchanged following the conclusion of its two-day meeting and said “a moderation in the pace of asset purchases (from the current $120bn a month) may soon be warranted’. with Jerome Powell, the Fed Chair, adding that this so-called tapering of its bond purchases could begin in November and end around the middle of next year

The Bank of England’s Monetary Policy Committee announces its latest policy decision at noon today. It is likely to keep interest rates on hold at 0.1% and continue its bond purchases programme until year-end as scheduled

Data due today include PMIs for the Euro area, UK and US with jobless claims due in the US also