This week the Federal Reserve committed to keep policy accommodative for as long as necessary. The dot plot had officials seeing US rates at their current ultra-low right through 2023. The immediate reaction to the Fed’s decision was USD strength. This was because the market was hoping for some announcements of extra stimulus. However, with US elections ahead that was unlikely. The takeaway point is that the Fed is set to maintain a low rate and loose accommodative policy for years to come. This should keep US equities supported and hold the maxim true, ‘Don’t bet against the Fed.’

Key events from the past week

• USD: Fed rate decision, September 16. The Federal Reserve kept interest rates unchanged near zero and indicated that they would stay there for at least three years. It also cautioned that the pace of economic activity would likely slow after ‘the recovery has progressed more quickly than generally expected’.
• GBP: BoE rate decision, September 17. With Brexit risks ahead the Bank of England faces further headwinds. The BoE revealed negative rates are now under consideration which opened up immediate GBP selling. See here for some of the comments to CNBC this week on the decision.
• GBP: PM Johnson Compromises: September 16. PM Johnson has agreed to compromise on his controversial Internal Market Bill according to Business Insider. However, as far as the EU is concerned, even with these amendments they still consider this Bill a breach of international law. More GBP risk is ahead.

Key events for the coming week

• NZD: RBNZ rate decision, September 23. The New Zealand treasury department revised unemployment levels higher for New Zealand this week, but will this optimism be echoed by the RBNZ?
• CHF: SNB rate decision, September 24. The SNB has the lowest interest rates of all central banks at -0.75%. Analysts’ expectations are for no change in the rates from the SNB. However, watch out for any comments on the value of the CHF that shows the SNB increasing their intervention in the EURCHF pair.
• EUR: German Manufacturing, September 23. The EUR gained after the ECB was more optimistic than the markets were expecting last week. A rise in Ger-man manufacturing this week would further bolster the ECB’s confidence and support the Euro.