The EUR/USD currency pair is struggling hard to keep the bids, but in vain, as the US dollar is gradually picking-up pace against its major peers, as focus shifts towards the Fed monetary policy decision due later in the NY session.
The downside remains restricted on the back of a cautious tone persisting across the financial markets, as traders remain wary and refrain from placing directional bets on the major ahead of the FOMC statement, which is likely to spur volatility into markets and could trigger extreme USD price action.
Investors continue to await Wednesday’s interest rate decision by the Federal Open Market Committee (FOMC), its third monetary policy statement release since their historic rate hike in December. The Fed has responded by holding its benchmark Federal Funds Rate at its current level between 0.25 and 0.50% in each of its first two meetings this year. Last month, the FOMC voted 9-1 to leave the Fed Funds Rate unchanged, with Kansas City Fed president Esther George serving as the lone dissenter.
Focus FOMC ….
The Fed is widely expected to keep interest rates on hold but markets will be closely eyeing the statement for hints of when the committee will announce its second rate hike since the first hike in December.