Magna Financial Market Report – Wednesday 7th May 2025
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• Trade talks scheduled this weekend
• Fed to keep rates steady
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RECAP
Ahead of today’s Federal Reserve meeting, the U.S. dollar experienced a modest decline, though the losses remained contained. The currency appears to have entered a short-term consolidation phase, with the dollar index continuing to trade within a narrow 1% range since April 15.
Meanwhile, equities recovered from earlier losses following comments by Scott Bessent, who noted that the U.S. had received some “very good” offers from its trading partners.
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SUMMARY
Markets saw a positive tone overnight following confirmation that U.S.-China trade talks will take place in Switzerland this weekend. However, some of the earlier gains in equity futures and the dollar have since retraced. Meanwhile, there are reports indicating that the U.K. and U.S. are engaged in intensive negotiations that could potentially lead to a reduction in certain tariffs.
The Federal Reserve is not expected to adjust interest rates at tonight’s meeting, a decision that may draw criticism from President Trump. Fed Chair Jerome Powell is likely to maintain a cautious, hawkish stance, signaling reluctance to pursue additional rate cuts. Recent data has diminished market expectations for a rate cut in June, and Powell’s comments will be closely watched for further confirmation of this shift.
In the foreign exchange market, price action remains range-bound, with no clear directional bias.
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HOW WE CAN HELP
Our team of currency experts are here to help you get more from your money when making international payments. We will work with you to understand your payment needs and offer specialized guidance on the best options available to you. Get in touch with Osman Hanif today on +44 (0) 20 3371 9200 or email osman@magnafinancial.com
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