- USD / JPY rose to a new 8-day high on Wednesday.
- The US Dollar Index extends the daily rally ahead of the FOMC policy announcements.
- Wall Street is looking to start the day deep in negative territory.
The pair USD/JPY it gained traction during European business hours and touched its highest level since January 19 at 104.03. At time of writing, the pair was up 0.38% on the day at 104.00.
With its sights set on U.S. stocks, FOMC
The broad-based USD strength is allowing USD / JPY to maintain its bullish momentum. The US dollar index, which tracks the dollar’s performance against a basket of six major currencies, rose to a weekly high at 90.62 on Wednesday, as safe-haven flows provided a boost to the safe-haven dollar.
Confirming the risk averse market environment, S&P 500 futures are losing more than 1%. The major Wall Street indices are set to start the day in negative territory and the USD is likely to continue to outperform its rivals in the second half of the day.
Data released by the US Census Bureau showed on Wednesday that durable goods orders in December rose 0.2% and disappointed market expectations of a 0.9% increase. However, investors largely ignored this report as they remain focused on the FOMC policy announcements at 19:00 GMT.
Market participants do not expect the US Federal Reserve to make changes to its monetary policy. However, FOMC Chairman Jerome Powell could hint at possible changes in the amount and duration of asset purchases and increase volatility in the last US session.
Technical levels
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