BRUSSELS (Alliance News) - The euro showed mixed performance in the early European session on Wednesday before the FOMC decision. Speculators expect that the Federal Reserve might delay stimulus tapering until 2014 on the back of a tame US inflation readings on Tuesday.
Chairman Ben Bernanke will give final quarterly news conference later today following the Federal Reserve rate decision. The Fed meeting is likely to overshadow the release of the Commerce Department's report on housing starts due out later in the day.
In economic news, German business sentiment improved to 109.5 in December from 109.3 in November, according to survey results compiled by the Ifo Institute. The reading matched economists' forecasts.
The UK claimant count fell slightly to 3.8% in November from 3.9% in October, the Office for National Statistics said today. The rate matched economists' expectations. The number of people claiming Jobseeker's Allowance fell by 36,700 to 1.27 million, the lowest figure since January 2009. Economists were expecting a fall of 35,000.
At the same time, the jobless rate came in at 7.4%, down 0.3 percentage points from May to July. It was below the expected 7.6% but near the Bank of England Governor Mark Carney's forward guidance threshold.
Policymakers of the Bank of England unanimously decided to maintain the interest rate at 0.50% and quantitative easing at GBP 375 billion, the minutes of the meeting held on December 4 and 5 showed today.
All the nine members of the Monetary Policy Committee agreed that neither of the price stability knockout conditions that would override the policy guidance provided in August had been breached.
The single currency slipped to a 6-day low of 0.8402 against the sterling, almost 14-pips lower-than its 50-day simple moving average at closing levels. The next likely support for the euro-pound pair is seen around the 0.8350 area if the 0.84 level is broken.
The euro dropped to session's lows of 1.3744 against the US dollar and 141.39 against the yen, down from early Asian session's failed test of yesterday's peak levels. If the European shared unit extends its downtrend, likely support levels are seen at 1.3710 against the greenback and 140.90 against the yen.
The common currency erased much of yesterday's steep losses against the Swiss franc, climbing to a 5-day high of 1.2236, up almost 0.6% from yesterday's 8-month low of 1.2166. If the euro-franc pair extends its advance, 1.2250 is seen as the next likely resistance level in the near-term.
