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| Société Générale Economists Examine How FOMC Meeting Could Affect EUR/USD |
Economists at Société Générale have analyzed how the upcoming Federal Open Market Committee (FOMC) meeting could impact the EUR/USD currency pair. They suggest that a smaller 25 basis points rate increase or a pause by the FOMC, along with minor upward revision of the dot-plot, could help EUR/USD to return to the upward trajectory of January.
However, Société Générale economists caution that a 50 basis points increase by the Fed and/or significant upward revision of the dots would be a major surprise and could smother the bullish argument for EUR/USD. They suggest that such actions by the Fed could backfire for risk assets. As the ball moves to the court of the Fed this week, market participants will be closely monitoring the FOMC meeting for any signals about future monetary policy decisions.
