As expected, the Fed raised the refinancing rate from 1.75% to 2.00% yesterday. Given the completely predictable outcome of the meeting of the Federal Commission for Open Market Operations, the decision had no impact on the market. Rather, it even turned out to be a boon for a single European currency, as tensions and expectations were left behind. At least a part of them, since today ECB board meeting on monetary policy will take place. It is most likely that the ECB’s board will not say anything about its plans for a quantitative easing program. This is indicated by factors such as the growth of inflation in Europe, as well as, the absence of a press conference following the meeting. The wording will be extremely vague, and, given the market’s concerns about the prospects for extending the quantitative easing program, this will be enough to somewhat reassure investors. Reducing tension will have a beneficial effect on the single European currency. Moreover, in the US, the forecast assumes a slowdown in the growth of retail sales from 4.6% to 4.4%, coupled with an increase in commercial inventories by 0.3%.
The EUR/USD currency pair continued to move in the range of 1.1725 / 1.1830, which is currently located at the upper border. In case of fixing the price above the upper limit, we are most likely to be dragged to the values of 1.1850 / 1.1900. Otherwise, the movement in the range will continue.
The material has been provided by InstaForex Company – www.instaforex.com