"It's reassuring. After the December jobs report everybody was pretty nervous. This is a number that makes it more likely December was a fluke."
- William Cheney, chief economist at John Hancock Financial Services Inc.
The U.S. Dollar can become very attractive for traders this week especially on Wednesday and Thursday, taking into account FOMC statement and GDP report. The Bureau of Economic Analysis is likely to show the world's largest economy slowed to 1.4% in the fourth quarter from 2.0% three months earlier. Personal consumption– the biggest part of the economy is also projected to decline. The attention, however, will be dragged on the FOMC meeting, the last time before Janet Yellen takes over as head of the Federal Reserve. The Fed is likely to trim its monthly purchases further, giving a bullish impetus to the greenback. According to a Bloomberg survey the U.S. central bank will cut bond purchases by $10 billion increments over the next six months before winding down the programme completely no later than December. JPMorgan Chairman & CEO Jamie Dimon says the economy is starting to build up steam, as six more million Americans are working and the government is doing no damage. In contrast, December's payroll report showed the economy created the lowest number of working places in three years, and it can be a reason for some dovish comments from the policymakers. Moreover, it will be the last time Bernanke will lead the meeting, so he can refuse making bold comments and simply make some conclusions on his work as a head of the Federal Reserve. As the greenback has a great potential to appreciate amid further tapering, the key support for EUR/USD is located at 1.3626.
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