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EUR/USD Moves Higher After FOMC Stays Passive

September 21, 2016 (Last updated on September 22, 2016) by

EUR/USD was moving higher today, and while it paused for a short time during the policy announcement from the Federal Open Market Committee, the currency pair continued to move to the upside afterwards.

US crude oil inventories dropped by 6.2 million barrels last week instead of rising by 3.2 million as analysts had predicted, though remained at the historically high levels for this time of year. The stockpiles were down 0.6 million the week before. Total motor gasoline inventories fell by 3.2 million last week but stayed well above the upper limit of the average range. (Event A on the chart.)

FOMC concluded its two-day policy meeting today, leaving monetary policy unchanged. It sent mixed messages regarding its future plans. On the dovish side, FOMC cuts the projected path for the federal funds rate. On the hawkish side, the statement said:

The Committee judges that the case for an increase in the federal funds rate has strengthened.

Furthermore, there were three dissenters who wanted to raise interest rates at the meeting. (Event B on the chart.)

Yesterday, a report on housing starts and building permits was released, showing that both of them were at the seasonally adjusted rate of 1.14 million in August. That is compared to the July’s readings of 1.21 million and 1.14 million respectively. (Not shown on the chart.)

EUR/USD as of 2016-09-21

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