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The U.S. central bank held interest rates steady as expected but discarded pledges of "further gradual increases" in interest rates, and said it would be "patient" before making any further moves.

·       "The responsive reaction by the Fed means that the chances of a recession have faded," said Michael McCarthy, chief markets strategist at CMC Markets.

·       The dollar index, a gauge of its value versus six major peers, fell around 0.1 percent to a three-week low of 95.26, having already fallen 0.43 percent overnight.

"The dollar index can hit 93.5 if the support level of 95 is broken," McCarthy said. "I expect commodity currencies such as the Aussie, Kiwi and Canadian dollar to do well."

·       The euro gained 0.24 percent to $1.1504 as the dovish Fed overshadowed concerns about weakening growth in the euro zone.

·       Sterling, which is grappling with troubles of its own on uncertainty over a deal to avoid a chaotic British exit from the European Union, was up 0.1 percent at $1.3131.

 ·       Euro Vulnerable to EU Data Dump? Markets Eyeing Italian GDP

The Euro may be closely watched this week as a cascade of data out of the EU is scheduled to be released on January 31. Markets will be eyeing data coming out of Italy in particular, given the state of its economy and the recently semi-resolved budget dispute. All of this would be occurring against the backdrop of forecasted slower growth – with data in recent months confirming it.

IMPACT, OUTLOOK ON THE EURO

In the long-run outlook, the Euro will likely fall given the potential political economy headwinds the currency faces in 2019. In the shorter term, EUR/USD appears to have broken through the January resistance and more recently shot up through the 1.1435 price barrier and closed above it at 1.1478.

While for Euro bulls this may be encouraging, it is important to not forget the long-term outlook. Since April, EUR/USD has declined over 10 percent. Given the outlook for 2019, it is likely the Euro will continue to fall, barring any unexpected.

 ·       Euro Vulnerable to EU Data Dump? Markets Eyeing Italian GDP

The Euro may be closely watched this week as a cascade of data out of the EU is scheduled to be released on January 31. Markets will be eyeing data coming out of Italy in particular, given the state of its economy and the recently semi-resolved budget dispute. All of this would be occurring against the backdrop of forecasted slower growth – with data in recent months confirming it.

IMPACT, OUTLOOK ON THE EURO

In the long-run outlook, the Euro will likely fall given the potential political economy headwinds the currency faces in 2019. In the shorter term, EUR/USD appears to have broken through the January resistance and more recently shot up through the 1.1435 price barrier and closed above it at 1.1478.

While for Euro bulls this may be encouraging, it is important to not forget the long-term outlook. Since April, EUR/USD has declined over 10 percent. Given the outlook for 2019, it is likely the Euro will continue to fall, barring any unexpected.

 

The bills face an uncertain future but underscore bipartisan concerns on Capitol Hill over the rising costs of the Trump administration’s trade policies. The United States in 2018 slapped duties on aluminum and steel from other countries, drawing criticism from lawmakers who support free trade and complaints of rising supply chain costs across business sectors.

 

The bills would require Trump to have congressional approval before taking trade actions like tariffs and quotas under Section 232 of the Trade Expansion Act of 1962. The law currently allows the president to impose such tariffs without approval from Capitol Hill.

 

·       The risk that Britain will crash out of the EU without an agreement is low but rising, while the likelihood that it will delay Brexit is growing, banking analysts said on Wednesday after mixed messages from votes in parliament.

Below are the views from a selection of investment banks and asset managers: