The Euro managed to recover some losses made in the wake of the Federal Reserve’s policy release yesterday which tended to support the greenback given that there were no Fed surprises. The FOMC minutes showed that the policy makers are still tracking a possible interest rate hike likely much later this year, but as analysts point out that is likely to be dependent upon data to support that decision. The minutes showed that the FOMC members believe raising rates sooner would be premature given the dismal start of the year.
As reported at 11:09 am (BDT) in London, the EUR/USD is trading higher at $1.1158, a gain of 0.61%; the pair has ranged between $1.1080 and $1.1171. The Euro is getting a lift from the recent release of PMI surveys which showed an uptick in France’s PMI manufacturing reading, though both of Germany’s PMI reports, manufacturing and services, failed to meet expectations.
BOJ Looms
Investors are also awaiting the release of the Bank of Japan’s upcoming policy statement and protocols. A majority of analysts don’t believe that the BOJ will make any major changes to current policy. There is, however, no clear consensus as to expectations; some expect the BOJ to increase QE, others foresee a lowering of deposit rates with private banks to encourage lending, still others have expectations that the BOJ might increase its inflation target. Analysts and investors are also anxious to learn is whether the Japanese central bank will upgrade its view of the economy. Currently, the USD/JPY pair is trading at 121.0610 Yen.