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Home / Analytics / Forex analysis & forecasts / Forex Fundamental analysis / The Euro is rising. Overview for 22.09.2016
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The Euro is rising. Overview for 22.09.2016

The main currency pair is moving upwards after the September meeting of the Fed.

Investors are buying the Eurodollar since Thursday morning, thus continuing the movement that started yesterday evening. The current quote for the instrument is 1.1225.

It seemed that the EUR/USD pair wouldn’t be able to fix above 1.12, but the Fed provided this opportunity. On the whole, the September meeting of the American regulator was over as expected: the interest rate remained unchanged at 0.25-0.50% and the Fed was going to make a break for receiving and analyzing updated statistics. The number of “hawks”, monetary politicians, who
voted in favor of the rate increase, was three, including Eric Rosengren.

It’s obviously that the Fed is not happy with the inflation. The indicator is below the required target of 2% and this factor is preventing the Central Bank from tightening the monetary policy. The CPI is recovering very slowly: one can see the upward tendency, but it is limited by the people’s buying activity and tariffs.

The next Fed meeting will be held on November 2nd, before the president elections. It’s highly likely that it will be more than quiet: external risks are rather high, so there is no need to scare investors and force high volatility on the capital markets.

According to futures, a possibility of the rate increase after the December meeting is 56%. Yesterday afternoon, it was 58%.
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