EUR/USD is quiet on Wednesday, as the pair trades in the mid-1.27 range in the European session. On the release front, it’s a quiet day in the Eurozone with only one release on the schedule, German 10-year Bond Auction. In the US, the FOMC is expected to wind up its QE program at the conclusion of its monthly meeting.
The Federal Reserve will be in the spotlight on Wednesday as the US central bank releases its monthly statement. It is widely expected that the Fed will wind up its stimulus scheme, which has been in place since September 2012. Such a symbolic step would mark a vote of confidence in the economy from the powerful Fed. The markets will also be looking for hints regarding the timing of a rate hike, which is expected sometime in 2015. Traders should treat this release as a market-mover which could have a significant impact on the direction of EUR/USD.
US durable goods looked dismal in September. Core Durable Goods Orders dropped 0.2%, its second decline in three months. This was well short of the estimate of 0.5%. Durable Goods Orders followed suit with a decline of -1.3%. This was a second straight decline, and missed the estimate of 0.4%. There was much better news from CB Consumer Confidence, as the indicator climbed to 94.5 points, up sharply from 86.0 points. The easily beat the estimate of 87.4 and marked a 7-year high.
German Ifo Business Climate continues to weaken, as the indicator dipped to 103.2 points in September. This was short of the estimate of 104.6 points and marks the sixth straight release that the indicator has lost ground. German GDP contracted in Q2, and another contraction in Q3 would indicate a recession in the Eurozone’s largest economy. German growth has been hurt as exports have been hit by EU sanctions against Russia, weak Eurozone demand and slower growth in China, Germany’s third largest trading partner.
EUR/USD 1.2741 H: 1.2747 L: 1.2724
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