Ahead of the release of German unemployment data the Euro was slightly softer against the US Dollar as investors favoured the North American currency in the wake of the Federal Open Market Committee policy meeting.
As forecast by the majority of economists the Fed opted to continue with its gradual tapering of stimulus.
Bond buying will be reduced from 75 billion Dollars to 65 billion Dollars in spite of December’s disappointing non-farm payrolls report and this week’s surprising slump in durable goods orders.
The central bank also reasserted its commitment to holding the target interest rate close to zero for the foreseeable future.
The decision buoyed the ‘Greenback’ but triggered widespread declines among higher-risk and emerging-market currencies.
The FOMC gathering was Ben Bernanke’s last as Chairman and while his successor Janet Yellen has adopted a pro-stimulus stance, economists expect the Fed to continue trimming easing with a view to bringing an end to the programme before the close of 2014.
According to economist Stephen Stanley; ‘As we transition from Bernanke to Yellen, she’s in a pretty good place in terms of holding together the centre of the committee. It should be relatively easy to hold together a pretty wide consensus. […] To the extent that there are doves who had misgivings about tapering, they were probably quelled to a great degree that the forward guidance was strengthened.’
The Euro was left trading slightly lower against a bullish US Dollar as European trading opened.
However, with an influx of influential European data scheduled for release in the hours ahead our Euro to US Dollar Exchange Rate Forecast for today is that the common currency will recover declines against the ‘Greenback’ and enjoy a neutral-positive trading session.
Already this morning the Euro has received support from the news that unemployment in Germany fell by 28,000 in January following a positively revised decline of 19,000 in December.
Economists had expected the level of joblessness to dip by 5,000.
The German unemployment rate consequently edged from 6.9 per cent to 6.8 per cent.
As the day continues Eurozone consumer/economic/industrial/services confidence reports will be released, as will German inflation data.
Of course US GDP figures and initial jobless claims data will also have an impact on the EUR/USD exchange rate.
Euro (EUR) Exchange Rates
[table width=”100%” colwidth=”50|50|50|50|50″ colalign=”left|left|left|left|left”]
Currency, ,Currency,Rate ,
Euro,,British Pound,0.8243 ,
Euro,,New Zealand Dollar,1.6712,
Euro,,Canadian Dollar,1.5222 ,