Euro is Trading Slightly Higher, FOMC Rate Statement Next
Euro stays firm versus US dollar today, in anticipation of the FOMC rate statement. The EUR/USD pair is trading at 1.1771 level, having gained 0.03%. The single currency pushed past the $1.18 line on Monday, followed hawkish remarks from ECB President Mario Draghi. ECB President, testifying before the European Parliament Economic and Monetary Affairs Committee, said there had been a “relatively vigorous pick-up in underlying inflation”.
A two-day meeting of the US central bank ends today. The regulator is expected to raise rates by 25 basis points. One more rate increase is also awaited in December this year. The focus will be on updated macroeconomic forecasts, which will include the first forecast for 2021, as well as comments by the regulator's head.
US economic growth remains strong, despite ongoing trade tension with China. Economists look for GDP year over year to be up 3% in 2018, compared to 2.2% in 2017, and 2.8% in 2019, suggesting only a modest slowdown next year. Inflation is seen ticking up to around 2.5% this year and next, while the unemployment rate is forecast to fall to 3.7% by 2019.