31, January 2014

EUR/USD (a 4-hour chart)

EUR/USD (a 4-hour chart)

The dollar almost did not react to the Fed's decision which generally coincided with the expectations. The Fed kept the base rate without changes and reduced the bonds purchase from February to $10 billion to $65 billion in a month. The Decision was made unanimously for the first time since June 2011. The fed will continue to reduce purchases with considered steps during next sessions. The fed raised its assessment of the situation in the economy and stated that the economic growth accelerated in recent quarters.

There is improvement in the economy and at the labour market. Risks to the economy and the labour market perspectives became more balanced. Household spending, companies investment grew more quickly. At the same time labour market indicators are ambiguous, although they demonstrate further improvement. In general the Fed's statement underwent very little change compared with the previous month. The Fed mentioned the recent instability at developing markets.

The pound continues to be supported by good statistics data from the Great Britain; on Wednesday it was the data from the housing market. House price growth in January according to Nationwide exceeded expectations (+8.5% y/y) and showed the fastest annual rate of growth since May 2010 (+8.8%). House price growth is supported by strong growth in the employment sphere and by record low rates on mortgage and trust.

The Euro did not also almost change during the day amid the consumer confidence growth in Germany to 6.5-year high. The leading index of consumer confidence in Germany from GfK grew in February to the highest level since August 2007 (to 8.2 p. against 7.7 p. in January), having exceeded expectations at the level 7.6 p. Growth indicator was promoted by optimism about the economy and a stable labour market of Germany.