The US Federal Reserve announced yesterday that interest rates will rise again from 1.50% to 1.75% as expected. This comes at Powell's first meeting as head of the Federal Reserve. This was the sixth rise since the bank began tightening its monetary policy at the end of 2015.
Despite the rate hike, selling pressures have dominated the US dollar for some time. These declines may be due to the Bank keeping the rate hike forecast unchanged this year. The rate is expected to rise three times as markets expected the bank to raise its forecast four times this year.
Turning to the New Zealand interest rate decision, the Reserve Bank of New Zealand continued its expansionary monetary policy and kept interest rates unchanged for the 16th straight month at 1.75. The bank looked optimistic about global economic growth and noted that inflationary pressures had begun to increase recently, but inflation growth was expected to slow further in the near term as food and energy prices fell and government fees adjusted.
As for the Bank of England, which decided today to keep its monetary policy unchanged, the interest rate was kept at 0.50% with a vote of 7 members. However, the British Pound recorded a mixed rally following the decision, which may be attributed to two members Ian McCafferty and Michael Saunders, wanted an immediate increase, leaving the markets ready to take this decision in May. Asset purchases were maintained at £ 435bn.
