EUR/USD holds in tight range post Fed statement, awaits Powell's presser

• EUR/USD is barely changed following a benign FOMC statement.
• Markets will be tuned into the Fed's chair and presser at the top of the hour for clarity. 

EUR/USD is currently trading at 1.2118 and between a 1.2058 and 1.2169 range on the day.

The euro has stuck to a tight range on the Federal Open Market Committee reaffirming its ‘statement on longer-run goals and monetary policy strategy’ while the Federal reserve left 

Its benchmark interest rate unchanged.

The target range stands at 0.00% - 0.25% and the interest rate on excess reserves are also unchanged at 0.10%.

Key notes from the statement

The statement states that the QE will continue at $80B in treasuries and $40B in MBS per month and that the pace of economic activity and employment has moderated in recent months.

Fed chair Jerome Powell's presser will now be what markets will tune in for at the top of the hour.

He may be questioned as to the change in the statement with respect to the lack of continuation in positive economic activity and employment. 

His projections for economic resilience pertaining to the spread od covid will be critical and he will most probably be pressed again for information about timings of tapering as the economy emerges out of the doldrums. 

BofA Global research’s rates team said it sees the taper outlook as the primary focus for the rates market at the January FOMC.

“We expect Powell to reiterate that Fed US treasuries and mortgage-backed Securities buying will continue until there has been ‘substantial further progress’ on inflation and employment, but he will likely need to acknowledge that risks have shifted toward an earlier taper and tightening, consistent with market pricing. We continue to believe Fed tapering is most likely to start in the first half of 2022 but see risks of an earlier start depending on the extent of fiscal stimulus.”

Watch Powell's presser live