Several central meetings last week and important decisions

The US dollar experienced a sharp increase in trading at the end of last week,
after the Federal Reserve set interest rates at 5.5% as expected.
On the other hand, the Swiss National Bank delivered a big surprise in a week full of central bank meetings
by lowering interest rates and indicating that strengthening the Swiss Franc was a reason for this.

Topic

The Swiss Franc

the Bank of England

The Swiss Franc

The Swiss Franc, which had been the best performer in the G10 group in 2023, declined by more than 1%,
continuing to fall on Friday as the USD/CHF pair rose by 0.4% to 0.9000, approaching parity.

This decision led traders to reassess the potential future actions of the Federal Reserve after last week’s Federal Open Market Committee meeting,
where officials once again highlighted the possibility of cutting interest rates three times this year if economic data supports it.

The US central bank significantly raised its growth expectations for 2024,
and data last Thursday showed that the US economy remains strong,
with unexpected declines in unemployment claims and previously owned home sales in February reaching their highest level in a year.
These signs indicate that the Federal Reserve is not in a hurry to cut interest rates in the future.

the Bank of England

On the other hand, the Bank of England kept interest rates unchanged on Thursday,
but two members of the Monetary Policy Committee withdrew their stance on the need to raise interest rates to combat falling inflation.

Bank of England Governor Andrew Bailey stated that expectations of interest rate cuts this year were “not unreasonable”.

In Europe, the president of the German central bank, Joachim Nagel,
stated on Friday that the European Central Bank might be in a position to cut interest rates before the summer holiday,
possibly in June, as inflation is expected to return to the central bank’s target of 2%.

Nagel’s statements make him join a long list of policymakers who clearly support an interest rate cut in June,
indicating that the European Central Bank would be the second major central bank to start cutting interest rates after the Swiss National Bank,
which had already begun a series of interest rate hikes.

Several central meetings last week and important decisions

Several central meetings last week and important decisions

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