On Wednesday, the euro to dollar exchange rate pared previous losses ahead of the Federal Open Market Committee (FOMC) meeting today.
The euro edged up 0.05% to $1.17 as the single currency reversed its consecutive lows this week.
Accordingly, traders closely watched possible signals on Fed Chair Jerome Powell’s statement regarding the asset tapering timeline.
Consequently, analysts expected that the Federal Reserve would start to cut back its $120.00 billion monthly purchases of Treasuries and mortgage-backed securities.
Also, other experts estimated that the central bank would pare back its purchases starting on $10 billion Treasuries and $5 billion securities a month.
In addition, the market heavily focused on the interest rate forecast dots, which charts policymakers’ economic projections.
Meanwhile, the European Central Bank highlighted in their study that house prices persistently weigh on the eurozone inflation.
Around 2018-2020, the ECB figures showed that housing costs head persistently higher inflation.
Subsequently, policy hawks argued that low interest rates put upward pressure on house prices.
Furthermore, the US dollar index, which traces the greenback to a basket of currencies, edged down 0.01% to $93.19.
Then, the pound sterling plummeted 0.15% to $1.36 as the Canadian dollar lowered 0.31% to $1.28.
Likewise, the South Korean won plunged 0.06% to $1,183.50 as the Singapore dollar stumbled 0.04% to $1.35.
Subsequently, other currencies climbed as the euro to dollar exchange rate hiked.
The Australian dollar soared 0.29% to $0.73 as the New Zealand dollar soared 0.26% to $0.70.
Similarly, the Hong Kong dollar rose 0.01% to $7.79 as the Indian rupee extended 0.18% to $73.87.
Yen Exchange Rate Up as Euro to Dollar Rebounds
Moreover, the yen exchange rate improved as the euro to dollar exchange rate rebounded.
The USD/JPY pair amplified 0.26% to $109.48 as the EUR/JPY pair elevated 0.32% to $128.44.
Also, the AUD/JPY pair inched up 0.48% to $79.35 as the GBP/JPY increased 0.12% to $149.36.
Consequently, the Bank of Japan’s decision to maintain its monetary policy stance amid the slowed economic recovery pulled down the yen.
In addition, the policy board members came to a consensus to unchanged its -0.10% interest rate.
Elsewhere, the Swiss franc against the US dollar declined 0.14% to $0.92.
Similarly, the EUR/CHF pair decreased 0.09% to $1.08.