Euro/dollar lost its position Tuesday
Euro/dollar has lost all yesterday's achievements during Wednesday's trades. ECB auction to refinance commercial banks was the first from 3 planed ones and was took by forex market participants as one form of quantitative easing that was naturally not in favour of the euro. Euro decline was enforced after FOMC minutes report from the Fed. Entirely FOMC minutes met market expectations. 2-day meeting FOMC took a decision to keep federal reserve interest rate unchanged in the range from 0 to 0.25%. The decision was taken unanimously by 10 meeting members. The Federal Open Market Committee reported that in the light of economic situation the assets purchase program would not be changed. But no comment on deflation risk gave an additional support for dollar strength, as market players concern over rising energy prices which could lead at the end of this year to growing inflation risk and which would compel Fed to lift interest rates.
On this back euro/dollar fell under the level at 1.39, but rebounded quickly enough to 1.3940/60. The British pound also came under pressure after negative impression that governor of the Bank of England made with his comment that UK economic recovery would be more slow and difficult.
Wednesday's main events are developed around the Swiss franc. Although the Swiss National Bank (SNB) is not officially confirmed, but the sharp growth in USDCHF and the Swiss-Crosses against the single currency and sterling could not be explained but by SNB's new currency intervention. Euro/franc rose during Wednesday session from the low at 1.5010 to 1.5380, franc/dollar edged up from 1.0630 to 1.1020, pound/franc hit the new 6-month high at 1.8114. Euro/franc broke through the 200-day moving average, warning traders of possible reversal of downward trend.
