A key development in capital markets since mid-April has been the strengthening of the US Dollar, gaining back some of the ground lost in 2017. Whether it can persist is unclear at this stage, given the large increase in Government borrowing that will occur to fund the recent fiscal giveaway.

The Bank of England (BoE) Monetary Policy Committee’s (MPC) decided last week to leave interest rates unchanged due to the economic uncertainty created by a number of weak first quarter data points. However, this week’s labour market data releases provided some cause for optimism.

The Bank of England (BoE) was centre stage this week, with Thursday seeing the announcement of the latest interest rate decision for the UK. The result itself was relatively unsurprising. The BoE’s Monetary Policy Committee (MPC) voted by a 7-2 majority to keep base rate on hold at 0.5%, a result that had been foreseen with a probability of 87% immediately prior to the announcement.

The major event this week was the meeting of the Federal Open Market Committee (FOMC), which sets interest rates in the US. The FOMC has been gradually raising interest rates for over a year, and was widely expected to leave them unchanged at this meeting, which it did.