The euro strengthened against the other major currencies in the European session on Wednesday, as traders await the German inflation data for April, due later in the day. The outcome of the two-day FOMC meeting, which concludes later today is also in focus.
At 8.00 am ET, Destatis is slated to release German consumer prices for April. Economists forecast prices to rise 0.4 percent on a yearly basis in April following a 0.3 percent increase in March. The harmonized index is expected to grow 0.2 percent annually, the same rate as seen in the prior month.
The Fed said conclusively at its March meeting that interest rates will be data-dependent. Public remarks of Fed officials since the March meeting also emphasized a cautious approach to interest-rate increases.
The Fed is widely expected to leave interest rates unchanged at the meeting, but traders will be paying close attention to comments regarding a rate hike at the June meeting.
In news out of Greece, Prime Minister Alexis Tsipras on Tuesday threatened to call a public referendum on any deal with the country’s international creditors if EU talks collapse.
In other economic news, data from the European Commission showed that Eurozone economic sentiment index fell to 103.7 from 103.9, which was the highest score since July 2011. This was the first fall in five months. It was expected to remain unchanged at 103.9 in April.
In the Asian trading, the Euro held steady against its major rivals.
In the European trading today, the euro rose to nearly a 5-week high of 1.0507 against the Swiss franc, nearly 4-week highs of 1.1013 against the U.S. dollar and more than a 3-week high of 131.27 against the yen, from early lows of 1.0475, 1.0958 and 130.25, respectively.
If the euro extends its uptrend, it is likely to find resistance around 1.07 against the franc, 1.13 against the greenback and 133.00 against the yen.
The euro advanced to 0.7157 against the pound, from an early low of 0.7136. On the upside, 0.75 is seen as the next resistance level for the euro.
Moving away from an early near 2-year low of 1.3677 against the Australian dollar, the euro edged up to 1.3788. The euro may test resistance near the 1.43 region.
Against the New Zealand and the Canadian dollars, the euro climbed to 2-day highs of 1.4309 and 1.3243 from early lows of 1.4186 and 1.3189, respectively. The next possible upside target for the euro is seen at 1.46 against the kiwi and 1.34 against the loonie.
Looking ahead, preliminary German inflation report for April, Canada industrial product price and raw materials price indices for March, U.S. first quarter GDP data and U.S. pending home sales data for March are set to be published in the New York session.
At 2:00 pm ET, Federal Reserve will announce its decision on monetary policy. The Fed is expected to hold rates at 0.25 percent.
The material has been provided by InstaForex Company – www.instaforex.com