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Euro/Dollar Stabilized Near Balance Line

In Europe the euro/dollar is going for 1.1048, the pound/dollar for 1.5643. No news from Greece and important economic reports from EU countries are keeping the pair close to 1.10. After a fall to 1.1029, the euro/dollar stabilized near the balance line. Fluctuations at the current level are expected until the European session closes.

The pound/dollar hit 1.5648 during European trading and ignored weak retail sales data. The retail sales index dropped from 29 to 21. Information came to light about a rise in demand for the pound due to an M&A deal (merger and acquisition). Therefore the pound didn’t react as it should have to the retail sales data. Even more so because the euro/pound is down. Euro sales in the cross are giving additional support to the pound.

An American company, Lone Star, has agreed to buy a British property company, Quintain Estates and Development, for 700 million GBP (around 1.1 billion USD).

The market is now waiting for the outcome of the FOMC meeting, whereby an announcement will be made. The Fed is expected to leave things as they are and it’s expected that they will announce that the date for putting up the base rate will depend on the data. The current meeting won’t be followed by a press conference and so the reaction from traders this evening could be quite reserved.

At 17:00 the US is publishing data for June incomplete housing sales. The data may or may not have an effect on the market. Thursday will see Q2 US GDP data out. If fluctuation across the key pairs will be weak after the FOMC has convened, then tomorrow they will go wild when the GDP data is out.

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