Yesterday (25/01), EUR/USD moved upward in a session without volatility as investors awaited for the first meeting of the new year of Federal Open Market Committee which is scheduled today. The currency pair moved between $1.07817 and $1.08557, before settling at $1.08481, up 0.54% compared to the opening price of $1.07901.
European Centre Bank (ECB) President Mario Draghi had a speech at the Deutsche Börse Group New Year’s reception 2016, Eschborn yesterday to talk about the outlook of Eurozone area and the global economy as well. Specifically, Draghi said that the mandate of ECB is to make sure the uncertainty in emerging markets and commodities do not blow the domestic recovery. While is eurozone is boosted by consumption in the context of failing energy prices and quantitive easing such as APP (asset purchasing program), negative interest rate and the flourish in labour market, the world economy growth is slowing down. The International Monetary Fund (IMF) lowered there forecast for the 2016 from 3.6% to 3.4% due to the sluggish in almost all parts of the world. ECB is expected to cut interest rate more 10 basis pont in its March meeting to -0.4%, expanding the negative period which have last more than a year and a half.
It is no double that the Fed will not act in this upcoming meeting. The GMC’s Fedwatch index shows that there is only 11% possibility that FOMC will raise its interest rate because the current situation in manufacturing and service sectors and the crude price is preventing the inflation to go back to the target goal of 2%. Without the support, the US dollar held on loss against other major currencies including Euro.
The dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, eased 0.25% to 99.35.
Analysis of Group Fiiinvesting