Analysts at Bank of Tokyo Mitsubishi explained that the euro is expected to remain more stable against the US dollar in the week ahead after failing to break higher following the more dovish than expected FOMC meeting.
Key Quotes:
The US dollar has been recovering from the initial sharp losses sustained in the
aftermath of the FOMC meeting supported by more hawkish than expected
comments from Fed officials over the last week. Fed officials have attempted to
correct market expectations for Fed policy which became too dovish after the FOMC meeting.
The release of the latest PCE deflator and US employment reports in the
week ahead will be important in determining whether the market continues to price in an increasing likelihood of the Fed resuming rate hikes in Q2 which would help the US dollar to rebound in the near-term. Comments from Fed officials including Vice Chair Dudley will be watched closely as well.
The tragic Brussels terrorist attacks have increased the perceived risk of Brexit which is weighing modestly on the euro given the potential for negative spill over effects on the rest of Europe.”
(Market News Provided by FXstreet)