IForex Daily : June 18, 2014

 | Jun 18, 2015 05:07AM ET

In yesterday's FOMC statement, no hints were given on the timing of the initial rate hike, however Federal Reserve officials clearly stated that they consider the current growth path as very fragile and aggressive moves could break something. Projections from the FOMC published Wednesday showed that five officials forecast only one increase in the rate this year, while before, only on policy maker supported this. Fed Chair Janet Yellen said she still wants to see more "decisive" evidence of a lasting turnaround according to Bloomberg. This uncertainty on behalf of the Fed comes from a slump in growth at a 0.7 percent annual rate in the first quarter, caused by severe weather, port disruptions and a stronger dollar that affected exports. Following the FOMC statement, the dollar fell against most major currencies while stocks rose with the Standard & Poor's 500 Index up by approximately 0.2 percent. For today, New Zealand is to release data on growth, Switzerland is to publish data on the trade balance, the Swiss National Bank is to announce its Libor rate and publish its monetary policy and the U.K. is to release data on retail sales. Later in the day, the U.S. is to release a string of data, including reports on consumer prices, initial jobless claims and manufacturing activity in the Philadelphia region.

EUR/USD

The euro gained significantly against the dollar on Wednesday, crossing 1.13, after dovish comments by the Federal Open Market Committee and no hints on the timing of the initial rate hike. Despite the increased possibility of a rate hike this year, the Fed still expects to raise rates gradually on a longer-term basis, as growth is still considered as fragile and more "decisive" evidence of a turnaround is required. By the end of 2016, the Fed projects the rate will reach 1.625%, down from previous projections of 1.875% made in March. The Fed also downgraded its expectations for GDP growth for the year, slashing it to a level between 1.8%-2.0%, down from previous of forecasts of 2.3 to 2.7%. In Europe, the Greece Central Bank warned that the nation could be facing an "uncontrollable crisis," if a deal is not reached with its international creditors to unlock critical aid deemed necessary to avoid bankruptcy. For today, markets will be focusing on a string of data from the U.S., including reports on consumer prices, initial jobless claims and manufacturing activity in the Philadelphia region.