EUR/USD edges lower to around 1.0935 in Wednesday’s Asian session.
The Fed is expected to leave its interest rate unchanged and will update its rate projections on Wednesday.
Germany's parliament approved plans for a massive spending surge on Tuesday.
The EUR/USD pair weakens to near 1.0935 during the Asian trading hours on Wednesday, pressured by a modest recovery in the US Dollar (USD). Traders prefer to wait on the sidelines ahead of the US Federal Reserve (Fed) interest rate decision on Wednesday.
The stronger-than-expected US economic data on Tuesday has provided some support to the Greenback. Data released by the Fed showed that Industrial Production in the United States rose by 0.7% MoM in February, compared to 0.3% in January (revised from 0.5%). This reading came in above the market consensus of 0.2%.
Markets widely expect the US central bank to hold rates steady at its March meeting on Wednesday amid persistent inflation concerns and economic uncertainty. The Press Conference and Summary of Economic Projections (SEP), or ‘dot-plot,’ will be closely watched as it might offer more cues about the economic outlook and the path of US interest rates.
Across the pond, Germany's parliament approved plans for a massive spending surge on Tuesday. This positive development could underpin the shared currency, as the approval of the plans in the Bundestag on Tuesday would provide the chancellor-in-waiting with a windfall of hundreds of billions of euros to boost investment after two years of contraction in Europe's largest economy.
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