The Euro US Dollar (EUR/USD) exchange rate has been trading in a volatile range this morning as markets await the latest Federal Reserve interest rate decision.
The EUR/USD pairing are currently trending around the $1.2128 level as a lack of notable data from the Eurozone limits the single currency.
Euro (EUR) Muted on Absence of Notable Data
In absence of any notable data from the Eurozone today, the single currency has been trading in a mixed range against many of its major rivals this morning.
Whilst much of the Eurozone enjoys a fast-paced vaccine rollout and reopening from lockdown restrictions it has not been enough to provide fresh impetus for EUR.
All eyes remain focused on the Federal Reserve’s interest rate decision later today as markets anxiously wait to see what stance the bank takes moving forward.
US Dollar (USD) Awaits Federal Reserve Interest Rate Decision
The US Dollar has found itself firming this morning as markets await the latest interest rate decision from the Federal Reserve, and FOMC economic projections later this on this evening.
Markets remain anxious over the FOMC’s meeting which is expected to be the main catalyst for movement in the EUR/USD pairing.
More so, disappointing retail sales from the US released yesterday afternoon have kept the US Dollar on the back foot this morning.
Joseph Capurso, Head of International Economics at Commonwealth Bank of Australia commented on what to expect from the Fed this evening:
‘EUR/USD and GBP/USD are slightly higher ahead of the FOMC. Both currencies can lift today if the FOMC is dovish as we expect. USD is steady ahead of today’s FOMC meeting. A key focus for participants is if a majority of FOMC members bring forward the start of the tightening cycle to 2023.’
Euro US Dollar Exchange Rate Outlook: Eurozone Inflation in Focus
For Euro investors, tomorrow will see the release of the most recent inflation figures from the Eurozone for May.
Inflation is forecast to have risen to 2% in line with the bloc’s recovery from the worst of the coronavirus pandemic.
US Dollar traders will keep an eye on the latest initial US jobless claims from the week ending 12th June.
USD could find fresh support from the jobless claims figures if they continued to fall at a sustained pace.