Valeria Bednarik, chief analyst at FXStreet explained that the common currency maintained its upside momentum for third week in-a-row, rallying against the greenback up to 1.1341 on the back of a dovish FED.
Key Quotes:
“The US Central Bank left rates on hold, but what actually hit the greenback was that FOMC members’ median projection of rates that was cut by about 50bp, leaving just two possible hikes for this year, pretty much taking out of the table any kind of announcement until September. Over the past two weeks, the imbalance between the FED and the ECB kept widening, which means that in the long run, the USD should outperform the common currency. But given the uncertainty surrounding the pace of rate hikes in the US and ECB’s Praet comments on prospects for potential future easing later in the year, the pair may keep rallying for a bit longer before turning south.
Key events in U.S. Q4 GDP and Japan CPI – Nomura
During this upcoming week, markets attention will focus in the EU PMIs, and German ZEW survey. In the US, investors will be looking for the outcome of Durable Goods Orders and the ISM Manufacturing PMI.”
(Market News Provided by FXstreet)
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