Fed expected to cut rates, BoJ may hint at rate hikes, potential for US dollar downside

From Investing.com: 2024-12-18 05:57:00

The focus is on the Fed as they are expected to cut interest rates by 25bps, with a high chance of a January pause. Markets will closely watch for clues on further rate cuts and a potential pause in 2025, with downside risks for the US dollar if expectations are not met.

The BoJ may hint at more rate hikes at the start of next year, despite reduced expectations for a hike at the upcoming meeting. Positive economic factors could support a potential quarter point hike in January, benefiting the Japanese yen.

The pound remains strong ahead of the BoE meeting, supported by accelerating UK inflation data. Market expects the BoE to maintain rates until March, with only 58bps worth of reductions expected in December. Meanwhile, the loonie falls to a five-year low against the US dollar due to political uncertainty and easing inflation, raising expectations for another rate cut in January.



Read more at Investing.com: Fed and BoJ Enter the Limelight With Rate Decisions Ahead