The Fed cut rates by 25 basis points yesterday, lowering them to the 2.00-2.25% range. Despite the cut the USD strengthened as Fed’s Chairman Jerome Powell, suggested that the easing cycle will not be prolonged. However, the Chairman also stated in his press conference that this may not be just a one time rate cut and that there may be further cuts in the near future. Also, the market seems to be expecting that the next interest rate cut may be postponed to October.

Other economic highlights, today and early tomorrow

Today during the European session, we get Germany’s final reading of the manufacturing PMI for July, UK’s manufacturing PMI for July and later on from the Czech Republic CNB’s interest rate decision. In the American session, we get Canada’s manufacturing PMI and the US ISM manufacturing PMI. In tomorrow’s Asian session we get the Australia’s retail sales growth rate for June and from the Japan the meeting minutes of June are to be released.

EUR/USD H4

GBP/USD H4

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