The Federal Reserve's projections show a little more inflation and a little less growth this year and next, but the median projection showed, as it did in December, two rate cuts this year.
The GBP/USD pair surged to 1.3008 on Thursday, marking its highest level in 4.5 months. This upward momentum has fuelled speculation about additional gains for the British pound.
U.S. markets rose after Fed holds rates steady and projects slower growth, higher inflation. Dow, S&P 500, Nasdaq post gains. Markets react to tariffs and inflation uncertainty.
GBP/USD remained pinned to recent highs near the 1.3000 handle on Wednesday, with market sentiment bolstered into the high side after the Fed held steady on its plans to deliver more rate cuts in 2025, albeit later in the year.
Stocks managed to gain back almost exactly what they lost yesterday, finishing the day up about 1.1% to close essentially unchanged at Monday’s close at 5,675.
The USD/JPY pair remained firmer on the session as the Bank of Japan opted to keep rates unchanged at 0.5%, a decision that was widely expected by markets.
Risk sentiment shows signs of recovery by midday trading in New York, as investors anxiously await the Federal Open Market Committee (FOMC) meeting at 2:00 p.m., hoping that Federal Reserve Chair Jerome Powell will offer reassuring remarks on the strength of the economy.
The Euro flirts with a breakout above 1.0950, but volatility looms ahead of the FOMC meeting, with potential moves toward 1.12 or a sharp decline below 1.08.
