European session: focus on the Federal Open Market Committee’s first release of interest-rate forecasts

Data:

09:00 Germany IFO - Business Climate January 107.2 107.7 108.3

09:30 United Kingdom Bank of England Minutes

09:30 United Kingdom GDP, q/q (preliminary) IV quarter +0.6% -0.1% -0.2%

09:30 United Kingdom GDP, y/y (preliminary) IV quarter +0.5% +0.8% +0.8%

09:30 United Kingdom Mortgage Approvals December 34.7 35.3 36.2

11:00 United Kingdom CBI industrial order books balance January -23 -19 -16

The euro fell  after the European Central Bank was said to oppose restructuring its Greek bonds, adding to concern the nation will fail to win a deal to reduce its debt.

The yen slumped to the weakest level in almost two months against the U.S. currency after Japan reported its first annual trade deficit in 31 years, stoking concern the country’s fiscal health may deteriorate.

The dollar climbed before the Federal Open Market Committee’s first release of interest-rate forecasts. Australia’s currency climbed against the yen after the nation’s core inflation accelerated more than forecast.

EUR/USD: the pair showed low in area $1,2930. The rate receded later in $1,2950 area.

GBP/USD: the pair showed low in area $1,5530. The rate receded later in $1,5570 area.

USD/JPY: the pair become stronger above Y78.00.

At 1500GMT, NAR pending home sales are due along with the FHFA Home Price Index and also BLS Mass Layoffs data. This is followed at 1530GMT by the weekly EIA crude oil stocks data. At 1730GMT, the US Federal Open Market Committee decision is due. Also, this time around, from 1900GMT, the Federal Reserve will publish the FOMC participants federal funds rate projections for the first time, which will be ccompanied by updated quarterly economic assumptions. After this, at 1915GMT, Federal Reserve Chairman Ben Bernanke holds a news conference to provide additional context for the FOMC's policy decision.