EUR/USD (a 4-hour chart)
The U.S. dollar rose against most major currencies on Monday as investors are cautious before the U.S. Federal Reserve meeting, which will take place this week. It is expected that the FOMC will tell about gradual reduction of the program of bond purchases in the amount of $ 85 per month. In addition, the data on U.S. GDP for the 2nd quarter will be released on Wednesday, on Thursday we will find out the industrial production figures, and we are waiting for Non Farm Payrolls on Friday.
Euro / dollar fell to 1.3265 against 1.3281 late Friday. USD / JPY grew to 97.93 against 97.63 month low. Housing sales in the U.S. fell in June by 0.4% for the month. Dallas Fed PMI in July dropped to 4.4 compared to 6.5 in June.
Fed meeting will be one of the highlights of this week. It is likely that Federal Open Market Committee will specify plans to reduce purchases of bonds. Most commentators expect to start narrowing in September.
According to the results of a two-day meeting of the FOMC, which will end on Wednesday, the text of the statement is likely to undergo only minor changes, according to the ScotiaBank. "Less likely, but, nevertheless, a scenario where the Committee may try to prepare investors for future changes or even the just to declare that the reduction of QE3 will take place in September is possible," - the bank's analysts wrote. – "In this case, to mitigate the effects and avoid unnecessarily negative market reaction, FOMC may at the same time or a little later lower the target level of unemployment, the achievement of which will serve as a guide for first-rate increase, from 6.5% to 6%."