The Euro to US Dollar exchange rate weakened on Wednesday as investors take a wait and see approach to this evenings ending of the US Federal Reserve’s two day long policy meeting.
The US Central Bank is expected to announce a third tapering of its quantitative easing programme. Originally the monetary easing programme saw the Bank purchase $85 billion worth of bonds a month. Today the Bank is expected to announce that that will fall again to $55 billion.
If no tapering occurs then that will be seen as a big negative to the US Dollar.
Policy makers are expected to confirm that the recent run of soft data releases out of the world’s largest economy was a direct response to the severe winter seen at the start of the year.
The meeting is the first to be held with new Chairman Janet Yellen at the helm and economists are expecting her to take a more cautious approach to policy. Economists have raised their bets that the Fed will scrap its 6.5% jobless rate threshold in favour of more qualitative indicators to act as a guide to when interest rates should rise.
The Euro’s losses were held in check after the single currency found support from better than forecast construction data and news that the Greek economy may finally be improving. The nation entered the bank bond market for the first time since 2009.
Piraeus Bank SA sold €500 million worth of bonds in the first public debt sale from a Greek lender and the nation is forecast to sell debt for the first time in four years in May increasing confidence that the Eurozone recovery is beginning to aid the regions hardest hit economies.
The Euro is likely to experience volatility on Thursday if German producer price inflation data disappoints.
Euro (EUR) Exchange Rates
[table width=”100%” colwidth=”50|50|50|50|50″ colalign=”left|left|left|left|left”]
Currency, ,Currency,Rate ,
Euro,,US Dollar,1.3903 ,
Euro,,British Pound,0.8363 ,
Euro,,Australian Dollar,1.5279 ,
Euro,,Canadian Dollar,1.5546 ,
British Pound,,Euro,1.1958 ,
US Dollar,,Euro,0.7194 ,