“To answer the last questions we had into consideration, I would say no. The American dollar didn’t have a reason to appreciate”. The Fed’s message was quickly priced in and the dollar lost ground in a considerable manner. Although the word “patience” disappeared from the message, the Fed is not willing to start increasing interest rates, at least not in April. Janet Yellen mentioned that the labor market needs further improvement while the lately appreciation of the dollar hurt the economy on certain segments. Market participants are now looking at the summer as a large interval where an interest rate increase may occur.
Threats source for EURUSD is now located in the euro area. Greece’s problem is the most ardent as the Prime Minister Alexis Tsipras does not seem to treat the discussions in a serious manner. He is late in submitting to the EU officials a full set of economic reforms in order to unlock cash. On the other side, Troika is determined to resist the pressure of a possible scenario of Greece going into bankruptcy.
EURUSD is now trading at levels close to the morning before the Fed’s announcement, in the area of 1.0680. As a resistance level the 1.0700 may work well in the short term while 1.0600 may function as a support area. The EURUSD currency pair could develop a sideways move as it may need a pause until next week when the European PMI indicators will help us to refresh our image of Europe.
Meanwhile, the Sweden’s central bank took its key interest rate further into the negative territory as it is trying to help improve inflation. The Norwegian central bank resisted the calls of cutting the rate, but the vulnerability is rising.
The BOE’s MPC meeting minutes revealed that all members are willing to keep in place the Asset Purchase Facility and the interest rate. GBPUSD had a noticeable downward trend lately and it could run a correction until intensifying political tensions will bring pressure back on the pound.
The SNB Monetary Policy Assessment revealed that the interest rate is being maintained for now and possibly for a long time from now on. The Swiss franc is considered as highly appreciated, with officials ready to intervene in currency markets if needed, while the economy is struggling with the biggest plunge in prices in six decades. Both EURCHF and USDCHF are making their way up to the levels before the 15th of January 2015 and this scenario may have chances to become reality soon.
