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FOMC Says Nothing New, EUR/USD Trades Balanced

April 28, 2010 by

EUR/USD traded with a great deal of the intraday volatility today, influenced by the expectations regarding Fed’s interest rate decision and Greek bailout. The currency pair was rising during the early trading session and decreasing later. It stabilized near slightly above its open level at 1.3188.

FOMC has decided to leave the interest rates unchanged in a range between 0% and 0.25%. The statement shows that the Fed is expecting a continued moderate growth of the economy and a “subdued” inflation rate. One of the board members (Thomas M. Hoenig) voted against the decision, stating that:

…continuing to express the expectation of exceptionally low levels of the federal funds rate for an extended period was no longer warranted because it could lead to a build-up of future imbalances and increase risks to longer run macroeconomic and financial stability, while limiting the Committee’s flexibility to begin raising rates modestly.

Crude oil inventories increased by 1.9 million barrels last week, while the total motor gasoline inventories fell by 1.2 million barrels in U.S. Both are above the upper limit of the average range for this time of year.

If you have any comments on the recent EUR/USD action, please, reply using the form below.

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