FOMC Could Spark Volatility Later Today

Overnight, the Eurozone posted a weaker Manufacturing PMI at 49.0 versus the expected 49.7 but registered a stronger Industrial Orders rise to 2.6%. The effect on the EURUSD was to produce a mild retreat from 1.4820 to its current 1.4790.

Meanwhile, UK releases showed that the Bank of England voted 9-0 to preserve its 175B purchase plan whilst UK Loans for House Purchase fell to 38095. In particular, the Bank of England decision helped sustain the GBPUSD overnight rally to 1.6445.

The major risk event today is, without doubt, the USD Federal Open Market Committee Interest Decision scheduled at 2.15pm EST.

Although the Fed has shown few signs that it intends to reduce its very large monetary stimulus in the near future, the release of any unexpected statements could initiate a volatile afternoon for the Forex Market.