EUR/USD Slides Before FOMC, Remains Almost Flat After Policy Announcement

EUR/USD rallied intraday but retreated ahead of the policy announcement by the Federal Open Market Committee. As was expected, the FOMC did not make any noticeable chances to its policy. Changes to the wording in the statement were minor, though some analysts thought that they made the announcement a bit more hawkish than the previous ones. As for Wednesday’s US economic data, it was generally good.
ADP employment rose by 234k in January, exceeding the median forecast of 186k. The December increase was revised from 250k to 242k.
Chicago PMI fell from 67.8 in December to 65.7 in January. Still, it was a better reading than 64.2 predicted by analysts.
Pending home sales rose 0.5% in December, matching forecasts exactly. The indicator was up 0.3% in November.
US crude oil inventories swelled by 6.8 million barrels last week, exceeding the average forecast of just a 0.1 million increase by a wide margin, after falling by 1.1 million in the preceding week. The stockpiles were in the middle of the average range for this time of year. Total motor gasoline inventories dropped by 2.0 million barrels but were near the top of the average range.
FOMC released its policy statement today, revealing that it left the range for the federal funds rate at 1.25%-1.5%. The statement said:

The Committee expects that economic conditions will evolve in a manner that will warrant further gradual increases in the federal funds rate.

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