The Dutch election looks like a comprehensive defeat for the anti-immigration Freedom Party and its leader Geert Wilders. With nearly all votes counted, Prime Minister Rutte has declared victory, and a collective sigh of relief has swept across politicians in France and Germany where elections will be held later this year.


A victory for Wilders could have led to further nationalist worries across Europe and the potential for further countries to leave the EU. Instead, the success of Mr Rutte has strengthened the Euro overnight, sending rates for buying Euros to their lowest point this calendar year.


The US raises interest rates, but Dollar weakens


The Federal Reserve used their policy meeting yesterday evening, to American raise interest rates from 0.75% to 1%. The move was widely anticipated, and while an interest rate rise typically means a more expensive currency, in this case, we have seen the opposite effect with rates for buying US Dollars improving overnight by nearly 2c. Markets took Chairman Janet Yellen’s accompanying speech as a sign that while rate rises will continue this year, the pace will be cautious and the Fed are concerned not to put pressure on consumer spending. So a “dovish hike” weakened the US Dollar and had provided a pleasant surprise this morning for any of you needing to buy the increasingly expensive US currency.


At home, UK unemployment figures came out on expectation at 4.7%, and likewise for US retail sales, as events in the Netherlands and at the Federal Reserve were the main market drivers.


Key week continues for the currency markets


There’s no time to draw breath before today’s events start to take hold. Eurozone inflation is released at 10 am, and the Bank of England’s interest rate and QE policy statement with accompanying press conference starts at 12 pm. Then we have a quieter afternoon before tomorrow’s meeting between President Trump and Chancellor Merkel, Eurozone trade balance and the Bank of England’s quarterly bulletin.


With so much going on in the currency markets it is essential to discuss your requirements with your currency broker to avoid being caught out by a sudden movement in exchange rates – contact us at Currency Index today.