uring the semi-annual event, Yellen claimed that the Fed had no set timetable to raise interest rates, although suggested that the economy was ready for a hike before the end of the year. Financial markets have begun heavily pricing in the possibility that rates will be raised in December following a series of impressive economic data and a string of hawkish rhetoric from policymakers. Fed futures now indicate around a 60% chance we’ll see a rate increase before the year is out.

Earlier in the day, Sterling temporarily dipped against its peers after Bank of England policymaker Minouche Shafik claimed that she expected the central bank to add further monetary stimulus “at some point” in order to protect the economy following the Brexit vote. She suggested that a rate cut this year would depend heavily on upcoming economic data, although she would rather act pre-emptively that do “too little too late”.

Yesterday we also had the news that OPEC announced that it had reached a deal to cut oil production for the first time in 8 years. Unsurprisingly, oil prices surged, ending around 5% higher for the day and taking with it a host of commodity driven currencies. Among the G10, the Canadian Dollar and Norwegian Krone soared on the back of the news.

Janet Yellen continues on day two of her testimony to Congress this afternoon. Revised economic growth data for the second quarter, set for release at 13:30 UK time today, is also expected to show a modest improvement on the original estimate. Any positive surprises above the 1.3% expected could provide decent support for the Dollar today.

Major currencies in detail:

GBP

The Pound rose by 0.1% yesterday, brushing aside earlier dovish comments from MPC member Shafik.

There remains a clear division among Britain’s MPC as to the next monetary policy move, especially following comments from Kristin Forbes last week that suggested extra stimulus was not necessary required. In a newspaper interview on Wednesday, Governor Mark Carney said that the long-term prospects for the UK economy were positive, with the economy performing as expected when rates were slashed last month. Economists remain split as to the possibility of another cut, and we think it will depend almost exclusively on upcoming economic data in the next few weeks.

Economic announcements in the UK remains on the light side today, with Friday’s GDP numbers the only major release of any note.

EUR

The Euro continued to trade mostly within a narrow range on Wednesday, edging 0.2% higher against the US Dollar.

ECB President Mario Draghi spoke in Berlin yesterday, rejecting criticism that the ultra-low interest rates in the Eurozone were the reason for the current issues plaguing Deutsche Bank and many of the Euro-area largest commercial banks. During a grilling by lawmakers, Draghi defended the ECB’s current stance as a means to lift both growth and inflation, instead citing a lack of efficiency among some of Europe’s top lenders as the reason for the bank’s current troubles.

The latest consumer and business confidence data at 10:00 Uk time is expected to remain mostly unchanged in July. Inflation data out of Germany this afternoon should give us a better indication as to the strength of Friday Euro-wide CPI numbers.

USD

Despite further hints of a 2016 hike by the Fed, the surge in oil prices caused the US Dollar index to dip on Wednesday, ending 0.2% lower.

Durable goods orders data out for August of the US yesterday pointed to continued woes in the country’s manufacturing sector. Orders came in above forecasts, although failed to grow at all in August. We also saw a downward revision in the July, with the headline figure lowered to 3.6% from 4.4%.

Today marks a particularly busy data in the US. The latest GDP numbers, jobless claims, consumer spending and trade figures will all be announced this afternoon.

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