On Wednesday, US data release showed a 0.3% rise in the CPI (Consumer Price Index) for the month of February compared to January’s figures, while the expectation was for a 0.2% hike. The headline CPI came in as expected at -0.2%. Another data release from the same day showed a housing starts figure better than expected in February.
The FOMC’s (Federal Open Market Committee) decision to leave unchanged the monetary policy rate and also lowering the 4 rate hikes expectation to only 2 rate hikes over this year were the main drivers of this fall in the greenback.
The EUR/USD major started to go up from under 1.1100 and closed the day just over 1.1200 due to the American dollar weakening across the board. The FOMC’s (Federal Open Market Committee) decision to leave unchanged the monetary policy rate and also lowering the 4 rate hikes expectation to only 2 rate hikes over this year were the main drivers of this fall in the greenback. Although the poor data, investors can see that Fed’s projections are now more realistic give the global economic trend. The pair traded over the day just at last week’s high of 1.1217; although before the meeting the spot was at 1.1080 and going up over 100 pips during Yellen’s speech.
On Thursday, the European currency pushed the EUR/USD pair over the 1.1300 thresholds, recording new daily highs. The pair has broken the 1.1300 resistance line after inflation in the Eurozone came out just over the expected value for the month of February. The headline CPI went up 0.2% on a monthly basis (January posted 0.1%) and -0.2% year on year while core CPI went up 0.8% on a yearly basis versus an expected 0.7%. Also, BOE (Bank of England) left untouched the monetary policy pillars at yesterday’s meeting, keeping the benchmark rate at 0.5% and the asset purchasing program’s allowance at £375 billion. The MPC’s (Monetary Policy Council) vote was 9 to 0 in favor of leaving the current monetary policy intact.
