The EUR/USD currency pair held within a tight daily range on Wednesday ahead of the outcome of the European Central Bank’s and the Federal Reserve’s policy meetings.
The European Central Bank is largely expected to keep its main refinancing operations rate intact at 2.15% at its April 30th meeting.
And, the ECB deposit facility rate is expected to be kept at 2.00%.
The ECB’s March decision to hold rates was framed against a backdrop of uncertainty around inflation and growth linked to joint military operations by the United States and Israel against Iran.
ECB President Christine Lagarde had cautioned that the “increase in energy prices will drive inflation above 2% in the near term.”
A report by Reuters had suggested that the ECB might consider discussing an increase in key borrowing costs in April and could move to raise rates in June if elevated energy prices persist.
Meanwhile, the Fed is largely expected to leave its federal funds rate target range intact at 3.50%-3.75% at its April 28th-29th meeting, following three successive rate cuts last year.
The vast majority of FOMC policy makers judged that upside risks to inflation and downside risks to employment were elevated, while many officials noted these risks had risen with developments in the Middle East, the minutes from the Fed’s March meeting showed.
A prolonged confrontation in the Middle East would likely trigger more persistent increases in energy prices, while these higher input costs would be more likely to pass through to core inflation.
Investors will also be paying close attention to the press conference with Fed Chair Jerome Powell for clues over the timing of future interest rate cuts.
FOMC policy makers had signaled one rate cut for this year and another one in 2027.
The EUR/USD currency pair was last down 0.13% on the day to trade at 1.1696.
TradingPedia.com is a financial media specialized in providing daily news and education covering Forex, equities and commodities. Our academies for traders cover 
