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EUR/USD holds steady as market awaits Fed announcement

Published 01/29/2014, 11:25 AM
Updated 01/29/2014, 11:26 AM

Investing.com - The dollar traded steady to higher against the euro on Wednesday as investors remained in standby mode ahead of the release of the Federal Reserve's statement on monetary policy and interest rates later in the day.

In U.S. trading, EUR/USD was trading at 1.3649, down 0.16%, up from a session low of 1.3603 and off a high of 1.3685.

The pair was likely to find support at 1.3529, Thursday's low, and resistance at 1.3717, Monday's high.

The Federal Reserve will release its statement on monetary policy and interest rates later, and markets were betting that months of broad improvements to U.S. economic indicators will prompt monetary authorities to trim USD10 billion from its USD75 billion bond-buying program.

The program, launched in September of 2012, originally started out at USD85 billion in monthly purchases of Treasury holdings and mortgage debt a month.

Fed asset purchases seek to spur recovery by holding down long-term interest rates, which weakens the dollar as a side effect.

Elsewhere, the euro softened against the greenback after European Central Bank council member Christian Noyer said any rise in the euro's exchange rate would be negative.

The euro was up against the pound, with EUR/GBP rising 0.06% to 0.8249, and down against the yen, with EUR/JPY trading down 0.75% at 139.67.

On Thursday, Germany is to produce preliminary data on consumer price inflation as well as a report on the change in the number of unemployed individuals. Elsewhere in the euro zone, Spain is to release preliminary data on fourth-quarter growth.

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The U.S. is to publish preliminary data on fourth-quarter economic growth. The nation is also to release the weekly report on initial jobless claims and data on pending home sales.

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