The Euro is back to growing… slowly. Overview for 01.02.2018

The main currency pair has already responded to the results of the US Federal Reserve January meeting and is ready to resume the normal course.

On Thursday afternoon, EUR/USD is trading upwards. The current quote for the instrument is 1.2430.

So, the first meeting of the US Federal Reserve in 2018 was over. The results are quite expected: the benchmark rate remained at 1.50%. In the comments, the regulator said that it was still going to revise the rate three times this year and the major increase might probably happen in March.

Market expectations that the rate will be increased during the meeting on March 20^th and 21^st are 78%. The increase is expected to be 25 basis points, just like the Fed told in December last year.

The comments from the Fed also say that the Household Spending and the Employment are improving significantly, as well as the Business fixed investment. At the same time, the Unemployment Rate is gradually falling. The comments were some kind of “swan song” from Janet Yellen, because Jerome Powell was confirmed as the new Chairman starting February 5^th during this meeting.

The meeting attracted a lot of attention from investors and many of them completely ignored the January ADP Non-Farm Employment Change report. The indicator expanded by 234K, which is close to the December reading, but much better than the expected number of 185K. As we said earlier on several occasions, there is no direct correlation between reports from ADP and NFP, but sentiments on the labor market are quite clear.