Foreign exchange: euro exchange rate hardly changed - waiting for interest rate decision by the US Federal Reserve

FRANKFURT - The exchange rate of the euro barely changed on Wednesday before the decisions of the US Federal Reserve. The common currency was priced at $ 1.2123 in the afternoon. She was thus at the level of the morning.

The same picture is presented in the case of Franconia. The euro stands at 1.0903, which is just as little as the US dollar at 0.8996 francs. The dollar is thus still above a support line defined by Commerbank in a technical commentary at 0.8931 / 11.

The market is waiting for the monetary policy decisions of the US Federal Reserve. The price surge in the USA had recently increased significantly. In May the inflation rate had risen to five percent. The data on import prices published on Wednesday also indicate a strong rise in prices. They rose in May at the highest annual rate since September 2011. However, observers are not yet expecting a turnaround in monetary policy towards a more restrictive monetary policy.

"Despite the stronger than expected price data in the US, the Fed is likely to stick to its mantra that the rise in inflation is only temporary and consequently its focus may be on further monetary policy support for the labor market," said a market commentary by Dekabank. However, some observers believe it is possible that the Fed could give at least cautious signals that the billion-dollar bond purchases will be scaled back. Fed Chairman Jerome Powell has promised to signal such a move early on.

There were slight gains in the case of the British pound. Inflation in Great Britain has also risen significantly and is above the British central bank's target of two percent for the first time since 2019. In May consumer prices rose by 2.1 percent year-on-year, while analysts had only expected an average inflation rate of 1.8 percent.

For other major currencies, the ECB set the reference rates for one euro at 0.85830 (0.86150) British pounds, 133.19 (133.28) Japanese yen and 1.0896 (1.0899) Swiss francs. The troy ounce of gold was trading at $ 1,859 in London that afternoon. That was about a dollar less than the day before.

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Foreign Exchange
 
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News source: https://www.awp.ch