US interest rates unchanged

As was expected, the FED kept interest rates the same at 5.25%

Without making a move since June 2006, the FED shows they are willing to wait for more signals before making a decision. Fourth quarter USD GDP surprised at 3.5% but most of it was driven by consumer spending meaning that it might have just been consumers taking advantagous of warmer weather and lower oil prices. Analysts believe that this growth will not be sustainable and (if so) when this is reflected in the economic data the FED might then decide to lower rates.

The EUR/USD rallied back to the 1.30 level but we can still expect movement to be contained in the current range.