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More Tapering from Fed, EUR/USD Little Bothered

January 29, 2014 by

For some reason, EUR/USD dipped during the trading session, but very quickly recovered and traded sideways afterwards. Even the announcement of yet another stimulus tapering did not bother the currency pair much. It is worth remembering that the announcement was made during the US trading session and everything may change during the Asian and European sessions as traders around the world will digest the news. For now though, the currency pair trades virtually flat.

Crude oil inventories increased by 6.4 million barrels last week and are in the upper half of the average range for this time of year. This is compared to the forecast of 2.2 million and the increase of 1.0 million in the previous week. Total motor gasoline inventories decreased by 0.8 million barrels, but are well above the upper limit of the average range.

FOMC announced yet another reduction of its quantitative easing program today. The Committee said:

Beginning in February, the Committee will add to its holdings of agency mortgage-backed securities at a pace of $30 billion per month rather than $35 billion per month, and will add to its holdings of longer-term Treasury securities at a pace of $35 billion per month rather than $40 billion per month.

This means that the total size of monthly asset purchases was reduced from $75 billion to $65 billion per month.

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

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