• US data: ADP employment below expectations, ISM Manufacturing next.
• US Dollar weakens after data, EUR/USD attempts again to hold above 1.0900.
• Market participants await the FOMC decision.

The EUR/USD rose further after the release of US economic data that weighed on the US Dollar and ahead of the Federal Reserve rate hike. The pair rose to 1.0909, reaching the highest level since Monday.

From data to the Fed today, ECB tomorrow

The ADP employment report showed US private sector added 106K jobs in January, below the market expectation for an increase of 178K. It is the lowest reading since January 2021. The US Dollar weakened after the report

Next in line is the ISM Manufacturing PMI due at 15:00 GMT. It is expected to remain in negative territory for the third consecutive month at 48 in January.

The main event of the day will be the FOMC decision. At 19:00 GMT the Federal Reserve will release its statement. A 25 basis points is priced in. No fresh forecasts are being released. Analysts will look for clues about what the central bank will do next, how high it is willing to go and how it takes into account the latest evidence of a slowdown in inflation and mixed economic numbers. Jerome Powell, the Fed Chair, will hold a press conference at 19:30 GMT. Volatility is likely to jumped with the decision until the end of the American session.

On Thursday, the European Central Bank is also expected to raise interest rates. A 50 basis point is expected. ECB Christine Lagarde recently commented that more significant rate hikes are on the table after the February meeting, as inflation remains elevated.

Data released on Thursday showed the annual inflation rate in the Euro Area fell to 8.5% in January, the lowest in eight months and below forecast of 9.0%. The report estimated German inflation that was not available amid technical problems. The Core CPI remained steady at 5.2%.