EUR/USD, GBP/USD, USD/CAD, USD/JPY – U.S. Dollar Pulls Back As Fed Meeting Begins
- EUR/USD settled back above the 1.0850 level as Euro Area GDP Growth Rate exceeded expectations.
- USD/CAD declined as oil markets gained ground amid rising tensions in the Middle East.
- USD/JPY pulled back towards the 130 level as traders focused on the encouraging economic data from Japan.
U.S. Dollar Index faced resistance near the 20 EMA at 102.60 and pulled back towards the 102 level.
Today, traders focused on the economic data from the U.S. The Case-Shiller Index report confirmed the slowdown of the housing market, while CB Consumer Confidence declined in January.
It should be noted that trading is choppy ahead of the Fed decision, which will be released tomorrow. It remains to be seen whether traders are ready for big moves today.
EUR/USD failed to settle below the 1.0800 level and moved back above 1.0850. Today, EUR/USD traders focused on the Euro Area GDP data.
Euro Area GDP Growth Rate beat analyst estimates, providing ECB with an opportunity to deliver hawkish signals at the upcoming ECB meeting.
GBP/USD remained under pressure in today’s trading session. Today’s Mortgage Lending and Mortgage Approvals reports missed analyst estimates, which is not surprising as the UK housing market activity is slowing down due to high interest rates.
On Thursday, the BoE is expected to raise the interest rate from 3.5% to 4%, but it looks that this move has been already priced in by markets. GBP/USD will need additional catalysts to test the recent highs.
USD/CAD pulled back below the 1.3350 level as oil markets gained ground amid rising geopolitical tensions in the Middle East.
Interestingly, the rebound in commodity markets did not provide support to AUD/USD and NZD/USD. AUD/USD moved below the 0.7050 level, while NZD/USD settled near 0.6450.
USD/JPY failed to settle above the 20 EMA and pulled back towards the 130 level. Japan has recently reported that Retail Sales increased by 3.8% year-over-year in December, compared to analyst consensus of 3%. Industrial Production declined by 0.1% month-over-month in December, while analysts expected that it would fall by 1.2%. The encouraging economic data provided some support to the yen.
For a look at all of today’s economic events, check out our economic calendar.