Makro

The GBP/USD pair trades flat near 1.3475 during the European trading session on Thursday. The Cable consolidates as investors await the Bank of England’s (BoE) monetary policy announcement at 11:00 GMT.

Danske Research Team expects the European Central Bank (ECB) to leave the deposit rate at 2.00% while keeping the door open for summer tightening. The bank looks for 25bp hikes in both June and July and sees Euro Area Harmonised Indices of Consumer Prices (HICP) at 2.8–2.9% y/y, with core easing.

The Bank of England (BoE) is widely expected to hold the benchmark Bank Rate unchanged at 3.75% for a third consecutive meeting on Thursday, as traders assess the impact of the Middle East war on prices and the UK economy.

USD/CHF extends its gains for the third consecutive day, trading around 0.7920 during the Asian hours on Thursday.

The USD/JPY pair steadies near a 21-month high of around 160.45 during the early European trading hours on Thursday. Traders prefer to wait on the sidelines as Japanese authorities are on high alert for intervention after the Japanese Yen (JPY) breached the psychological level.

The AUD/USD pair gathers strength to near 0.7130 during the early Asian session on Thursday. The Australian Dollar (AUD) edges higher against the US Dollar (USD) on hotter domestic inflation data.

The EUR/USD pair loses ground to near 1.1680 during the early European session on Thursday. The US Dollar (USD) strengthens against the Euro (EUR) after the US Federal Reserve (Fed) left interest rates unchanged.

Wednesday's session had every excuse to rally. The Federal Reserve (Fed) decision was telegraphed. Big Tech earnings were teed up. The Dow Jones Industrial Average (DJIA) had reclaimed 49,000 just two days earlier.

The Federal Reserve (Fed) left its policy rate unchanged at 3.50% to 3.75%, a widely expected move, but the underlying message was far from straightforward.