EUR/USD Dips as Traders Wait for FOMC Statement

The majority of Forex market participants continue to bet on an interest rate hike in the near future, driving the US dollar higher. They anxiously wait for the outcome of the two-day policy meeting of the Federal Open Market Committee this week, hoping to see hints about timing of such hike in a central bank’s statement. EUR/USD bounced off the session’s lows after the worse-than-expected industrial production report but remained below the opening level.
NY Empire State Index rose from 14.7 in August to 27.5 in September, exceeding analysts’ projections of 16.4. The report stated that “business activity expanded at a robust pace for New York manufacturers”. (Event A on the chart.)
Both industrial production and capacity utilization disappointed economists, falling and trailing forecasts. Industrial production declined 0.1% in August after rising 0.2% in July (revised from 0.4%), while analysts predicted a 0.4% increase. Capacity utilization rate decreased from 79.1% to 78.8% last month instead of rising to 79.3% as was forecast by experts. (Event B on the chart.)


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