The USD is in demand. Overview for 30.01.2020

On Thursday, EURUSD is intending to continue its decline; investors favor the USD.

Yesterday, EURUSD tested the low of November 29th, 2019, but later managed to recover. The current quote for the instrument is 1.1012.

The two-day January meeting of the US Federal Reserve was over yesterday and the regulator decided to leave the interest rate intact at 1.50-1.75%. However, the rate wasn’t expected to change because all macroeconomic indicators in the USA bounced back last week, thus reducing the pressure on the Fed on the part of White House. 

Still, there was something interesting, such as the increase of the interest rate on excess reserves (IOER) from 1.55% to 1.6%. This is another step of the regulator aiming to foster trading in the federal funds market at rates well within the FOMC's target range. The IOER is usually seen as a guardrail for the funds rate. 

In addition to that, there were changes in the Federal Reserve Board, but, as a rule, it has no influence on financial markets. 

However, one should take into account the fact that now there are more “dovish” monetary politicians than “hawkish” ones. It means that if the regulator gets to choose between tightening or loosening its monetary policy, the Fed may tend to do the latter.