The euro traded near a two-month high against the dollar before a report that economists said will show European confidence in the region’s outlook improved for an eighth month.
An index of executive and consumer sentiment in the euro region increased to 106.7 in January from 106.2 the previous month, according to a survey before the European Commission report tomorrow.
The dollar declined toward a one-week low against the yen as President Barack Obama called for a freeze on non-security discretionary spending.
Losses in the dollar were tempered on speculation the Federal Reserve will signal the world’s largest economy is improving. The policy-setting Federal Open Market Committee will keep interest rates unchanged at the end of its meeting today, according to economists in a Bloomberg survey. The Fed has kept its benchmark at zero to 0.25 percent since December 2008.The pound
was close to a two-week low versus the dollar before a U.K. report forecast to show home- loan approvals dropped, giving the central bank more reason to keep interest rates low.
EUR/USD: the pair bargained in the field of the high reached yesterday.
GBP/USD: the pair it was consolidated within the limits of $1.5775-$ 1.5835.
USD/JPY: the pair decreased in around Y82.00.
UK data at 0930GMT includes the minutes of this month's MPC meeting as well as BBA Mortgage Approvals data for December. Speaking this week, MPC member Sentance made it clear he was sticking with his view that rates should be raised, while Adam Posen, in an interview last week, signaled that he would also maintain his opposed view that QE should be raised, so the question appears to be if the recent 1-7-1 voting pattern changes in light of the higher-than-expected CPI data.
US data starts at 1200GMT with the weekly MBA Mortgage Application Index. US data continues at 1500GMT, when the pace of new home sales is expected to rise to 300,000 at an annual rate in December, still very low relative to a year earlier. This is followed at 1530GMT by weekly EIA Crude Oil Stocks data.
The much awaited FOMC decision is due at 1915GMT.