Thursday’s Major Currency Pairs Analysis: Yen Edged Lower Wednesday

EUR/USDThe euro edged higher against the dollar on Wednesday after Federal Reserve monetary policy statement. Federal Reserve chair Janet Yellen said Wednesday that the Fed will remove a reference to remaining patient from its minutes, paving the way for an interest-rate hike at some point this year. While Ms. Yellen indicated that its benchmark Federal Funds Rate could be increased later this year, it will not occur until after the Federal Open Market Committee’s next meeting in April, at the earliest. Yellen added that the timing of the decision will be “data dependent,” and that a rate hike will not necessarily be made in June.

EUR/USD 4-Hour Chart

GBP/USDThe pound inched up on Wednesday despite U.K unemployment rate remained unexpectedly unchanged in January and investors eyed on the Federal Reserve meeting. Meanwhile, in a report by the U.K. Office for National Statistics, the rate of unemployment was unchanged at 5.7% in the three months to January, disappointing expectations for a decline to 5.6%.The report also showed that the claimant count fell 31,000 in February, compared to expectations for a decline of 30,000 people. January’s figure was revised to a drop of 39,400 people from a previously reported decline of 38,600. In addition, the minutes of the Bank of England’s most recent policy meeting showed that all nine members of the Monetary Policy Committee were in favor of leaving the key interest rate at a record low of 0.5% and making no changes to the central bank’s £375 billion asset-purchase program.

GBP/USD 4-Hour Chart

USD/JPYThe Japanese yen edged lower on Wednesday after the Federal Reserve’s anticipated policy statement. The Federal Reserve moved a step closer to hiking rates for the first time since 2006, but downgraded its economic growth and inflation projections, signaling it is in no rush to push borrowing costs to more normal levels. The U.S. central bank removed a reference to being “patient” on rates from its policy statement, opening the door wider for a hike in the next couple of months while sounding a cautious note on the health of the economic recovery.

USD/JPY 4-Hour Chart

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