EUR/USD Shoots to the Upside After FOMC

EUR/USD climbed today, erasing yesterday’s losses, after the Federal Open Market Committee provided no surprise, trimming quantitative easing by the expected amount, and hinted that interest rates should remain low for a long period. This time the meeting was not accompanied by a press-conference and economic projections, meaning that there was not much information on the plans and the outlook of US policy makers. Moreover, US economic growth unexpectedly stalled at the start of this year, giving no incentive for the central bank to accelerate stimulus reduction.
ADP employment grew by 220k in April, exceeding analysts’ expectations of 203k. The March increase was revised up from 191k to 209k. (Event A on the chart.)
US GDP increased at the annual rate of 0.1 percent in the first quarter of 2014. The increase was far below the expected value of 1.2% and the previous quarter’s growth of 2.6%. (Event B on the chart.)
Chicago PMI climbed from 55.9 in March to 0.1 percent in the first quarter of 2014. The actual figure was above the median forecast of 56.6. (Event C on the chart.)
Crude oil inventories increased by 1.7 million barrels last week and are above the average range for this time of year. The increase was in line with forecasts of 1.3 million and below the previous week’s growth of 3.5 million. Total motor gasoline inventories increased by 1.6 million barrels but are in the lower half of the average range. (Event D on the chart.)
As was expected, FOMC reduced its monthly asset purchases by $10 billion. At the same time, the Committee indicated that interest rates will remain low for a prolonged time (event E on the chart):

The Committee continues to anticipate, based on its assessment of these factors, that it likely will be appropriate to maintain the current target range for the federal funds rate for a considerable time after the asset purchase program ends

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