The EUR\/USD rally continued hours before the FOMC’s statement on US monetary policy, as it is highly expected that the regulator will maintain monetary policy settings at the same level. This will be the last meeting of the Federal Open Market Committee with Janet Yellen as chairman of the Federal Reserve, and the next chairman of the board, Jerome Powell, is likely to maintain the current track, that aims to gradually increase interest rates, which is likely to affect the EUR\/USD this year.<\/p>\n
The European single currency got a boost today, following positive economic data in the eurozone. Unemployment held still at 8.7% for December. Consumer inflation was 1.3% for January, which was in line with expectations. The USD\/CAD pair also fell amid the USD\u2019s recent losses, especially as Canada’s GDP rose to 0.4%, in line with analysts’ expectations. The rise in crude oil prices was another factor that positively influenced the Canadian dollar against the greenback.<\/p>\n
The greenback was under selling pressure on Wednesday, ahead of the Federal Reserve’s decision later today, which is widely expected to end with no changes to the monetary policy. Indeed, US interest rates will remain unchanged in January, so the attention will be drawn to Yellen’s press conference, which may hint at the possibility of interest rate hikes. This could provide the dollar with the support it needs if decision-makers adopt a bullish stance that strengthens market expectations with three interest rate hikes in 2018.<\/p>\n
The GBP received more support on Tuesday thanks to comments by Mark Carney, head of the Bank of England, which is optimistic about the British economy. The Bank of England has now shifted its focus towards reducing inflation, and speculation has grown that the central bank will raise interest rates faster than expected. Although the pound could continue to benefit from renewed interest rate expectations, an upward trend could be capped by growing concerns about Britain’s exit from the EU and political developments at home. From a technical point of view, GBP\/USD remains strong due to continued weakness in the USD.<\/p>\n
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