EUR/USD gathers renewed upside traction near 1.0560.The dollar’s momentum deflates somewhat ahead of FOMC.
US ADP Report disappointed expectations at 247K in April.The optimism around the shared currency now helps EUR/USD clinch fresh peaks in the 1.0555/60 band on Wednesday.
EUR/USD: All the attention on the Fed
EUR/USD now adds to Tuesday’s modest advance against the backdrop of the renewed offered bias in the US dollar. However, the extension and duration of this bullish move will be put to the test later in the day by the FOMC event.
It is worth recalling that the Federal Reserve is largely expected to raise the Fed Funds Target Range (FFTR) by 50 bps, although investors are expected to closely follow the subsequent press conference by Chair Powell, where the potential rate path and the balance sheet runoff should be in the centre of the debate.
Earlier in the session, the ADP Report showed the US private sector added 247K jobs during last month, while the ISM Non-Manufacturing is due later.
What to look for around EUR
EUR/USD remains depressed and flirts with the 1.0500 zone amidst lack of upside traction and absence of bulls’ conviction. The outlook for the pair still remains tilted towards the bearish side, always in response to dollar dynamics, geopolitical concerns and the Fed-ECB divergence. Occasional pockets of strength in the single currency, in the meantime, should appear reinforced by speculation the ECB could raise rates at some point around June/July, while higher German yields, elevated inflation and a decent pace of the economic recovery in the region are also supportive of an improvement in the mood around the euro.
EUR/USD retreats from session tops, holds above 1.0500 ahead of Fed.EUR/USD has lost its traction after having advanced to a fresh daily high above 1.0550. The dollar holds its ground after ISM Services PMI data showed that input prices in the service sector rose at a stronger pace than expected in April. Investors wait for the Fed to announce its policy decisions.
GBP/USD drops below 1.2500 on renewed dollar strength.GBP/USD has declined below 1.2500 in the early American session on Wednesday as the dollar preserves its strength and weighs on the pair ahead of the all-important Fed event. The ISM Services PMI report showed that input prices rose sharply in April.
Gold on the defensive below $1,870 ahead of key risk events.Gold is struggling to make a decisive move in either direction on Wednesday and fluctuating in a tight range below $1,870. The benchmark 10-year US Treasury bond yield holds near 3% ahead of the Fed rate decision, limiting XAU/USD’s upside.