The EUR/USD pair manages to hold the upside and now extends gains beyond 1.13 handle on the back of renewed USD selling across the board, triggered by BOJ-led sell-off in the USD/JPY pair.
The BOJ kept policy steady at its policy review meeting today, largely disappointing markets, who had bet for more easing this Thursday. USD/JPY slumped over 2%, dragging the greenback lower against its major peers. At the timing of writing, the USD index drops -0.36% to 94.05 levels.
The FOMC said it will assess economic conditions, measures of labor market conditions, indications of inflationary pressures and expectations, as well as readings on financial and international developments as it determines the size of future adjustments to the Federal Funds Rate. Since the FOMC last met in March, the central bank noted that economic activity has slowed in recent weeks. In addition, the FOMC said while the housing sector has shown improvement since the start of the year, business fixed investment and net exports remain soft.
The major finds support near 1.13 handle and keeps the upside bias intact against a backdrop of the latest dovish FOMC statement, which failed to provide clear hints on the next Fed rate hike this year. With the central banks’ events now behind, focus once again turns to fundamentals from both continents. The German prelim CPI, employment data as well as the US advance GDP report will be closely eyed in the day ahead.