The EUR/USD retreated on Thursday as the market digested the impressive US GDP data and the latest FOMC decision.It is also falling even after the strong European industrial sentiment data. It is trading at 1.2120, which was slightly below the intraday high of 1.2150
Federal reserve decision
The EUR/USD rose sharply on Wednesday evening after the Federal Reserve delivered its interest rate decision. As expected, the bank delivered a relatively dovish tone as it left interest rates and quantitative easing policies unchanged.
It will continue buying Treasury bonds worth $80 billion and mortgage-backed securities worth $40 billion every month for a while. Jerome Powell reiterated that the bank believes that the recovery is uneven and that higher rates will hurt the most vulnerable.
The EUR/USD is today falling even after relatively positive data from Europe. In a report, the European Commission said that consumer confidence improved from -10.8 in March to -8.1 in April. In the same period, services and industrial sentiment rose to 2.1 and 10.7, respectively. This improvement is mostly because of the ongoing vaccination efforts from the UK.
Further data from Europe showed that the German unemployment rate remained unchanged at 6.0% in April. Nonetheless, the unemployment change increased to 9k, partly because of the lockdowns to tame the virus.
The EUR/USD also declined as forex traders reflected on the latest US GDP data. The numbers showed that the American economy rallied from 4.3% in the fourth quarter to 6.4% in the first quarter. This figure was better than the expected 6.1% and was mostly because of increased consumer spending.
Government spending and fixed asset investments also rose. Economists expect that
