Forex Blog

EUR/USD fell intraday but has climbed after the Federal Open Market Committee left interest rates unchanged.

Pending home sales dropped 4.9% in December instead of rising by 0.5% as analysts had predicted. The sales were up 1.2% the month before. (Event A on the chart.)

US crude oil inventories rose by 3.5 million barrels last week, though remained below the five-year average for this time of year. That is compared with the forecast increase of 0.7 million barrels and the previous week’s drop of 0.4 million barrels. Total motor gasoline inventories rose by 1.2 million barrels and were also above the five-year average. (Event B on the chart.)

As was widely expected, FOMC left its target range for the federal funds rate at 1.5%-1.75%. (Event C on the chart.) The Committee commented on the decision:

The Committee judges that the current stance of monetary policy is appropriate to support sustained expansion of economic activity, strong labor market conditions, and inflation returning to the Committee’s symmetric 2 percent objective. The Committee will continue to monitor the implications of incoming information for the economic outlook, including global developments and muted inflation pressures, as it assesses the appropriate path of the target range for the federal funds rate.

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