The euro appreciated against its major counterparts in the European session on Tuesday, as investors awaited the Fed meeting beginning today for clues about the future outlook for the economy.
The meeting will conclude on Wednesday at 2 pm ET.
The Fed is widely expected to leave interest rates unchanged, but traders will be paying close attention to any changes in the accompanying statement.
Investors will closely watch the Fed’s reaction to the recent spike in bond yields, which has led to considerable volatility in Wall Street in recent sessions.
European stocks rose, tracking a rally in Asia and on Wall Street, amid optimism over the global economic recovery.
Survey data from the ZEW – Leibniz Centre for European Economic Research showed that German economic confidence improved in March.
The ZEW Indicator of Economic Sentiment rose 5.4 points to 76.6 points in March. The reading was above economists’ forecast of 74.0.
The euro edged higher to 1.1946 against the greenback and 130.40 against the yen, off its early lows of 1.1914 and 130.08, respectively. The euro is seen finding resistance around 1.22 against the greenback and 132.00 against the yen.
The euro that closed yesterday’s deals at 0.8575 against the pound climbed to near a 2-week high of 0.8640. Against the aussie, the euro hit a 6-day high of 1.5473, up from Asian session’s 4-day low of 1.5371. The next possible resistance for the euro is seen around 0.88 against the pound and 1.56 against the aussie.
The European currency gained to 1.6646 against the kiwi, after falling to 1.6551 at 5 pm ET. Versus the loonie, the euro remained higher at 1.4896. If the euro rises further, it may find resistance around 1.70 against the kiwi and 1.51 against the loonie.
In contrast, the euro weakened to a 6-day low of 1.1041 against the franc, following a high of 1.1076 seen at 5:30 am ET. Next key support for the euro is likely seen around the 1.07 level.
Looking ahead, U.S. import and export prices, retail sales and industrial production, all for February, business inventories data for January and NAHB housing market index for March are scheduled for release in the New York session.
The material has been provided by InstaForex Company – www.instaforex.com