China Tariffs

The U.S. dollar slipped after the Federal Reserve did not signal a faster pace of rate hikes this year while worries about a coming announcement on tariffs from U.S. President Donald Trump dented Asian shares. The U.S. Federal Reserve raised interest rates and forecast two more hikes for 2018 in its first policy meeting under Chairman Jerome Powell. Given that some investors had expected it to project three more rate hikes, the guidance was perceived by some as less hawkish than anticipated, a positive factor for risk assets in general, though analysts noted the Fed was upbeat on the economy overall.

Strong UK wage data published on Wednesday cemented expectations that the Bank of England will likely signal a May rate hike later in the day at a monetary policy meeting.

In currencies EURUSD gained 0.2 percent to 1.2363, extending its recovery from a near three-week low of 1.2240 touched earlier in the week. USDJPY, turned down on the week to edge closer to its 16-month low of 105.24. GBPUSD pushed higher up to 1.4171, building on previously gains.

In commodities OIL prices reached near six-week highs and closed in on a 3-year peak set in late January, helped by a surprise decline in U.S. inventories, strong compliance on OPEC production cuts, and persistent concerns on the nuclear pact with Iran.US Crude oil rose to as high as 65.75 per barrel with gains coming up to 5%. UK Brent reached 69.55 per barrel following the bullish sentiment.

The economic calendar comes with major economic events with high impact which should provide moderate to high volatility. UK Retail Sales, BoE Interest Rate Decision, BoE Quantitative Easing, BoE Ramsden Speech can move the British Pound significantly. The BoE is expected to leave unchanged the key interest rate at 0.5%. But the statements made by the BoE indicating potential future interest rate increases may influence more the currency than the actual announcement of the Interest Rate Decision.