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Mixed trading for EUR/USD ahead of major events later in the week

FXStreet (London) - EUR/USD has seen a mixed day so far, ranging between USD1.2923-1.2967. There has been an element of wait-and-see in the markets ahead of major events later in the week, with the Federal Reserve's FOMC two-day meeting concluding tomorrow, as well as the the release of Eurozone inflation data which could point to further stagnation in the currency union. While Scotland's referendum on Thursday falls outside of the Eurozone (though that might change if Scotland leaves the UK), the impending vote has further played into market uncertainty.

Germany's ZEW Institute release was the biggest name on the Eurozone's dance card today, with the think tank's index of the current situation coming in at a disappointing 25.4, against expectations of 40. Expectations slipped to 6.9 from 8.6 last month, but was not as unexpected as the current situation decline.

Fed tapering while ECB continues aggressive policies

Longer-term, EUR/USD direction remains driven by diverging monetary policy expectations between the ECB and the Fed. The former continues to take the “whatever it takes” approach to breathing some life into its economy while the Fed is expected to announce that it will continue tapering its quantitative easing programme.

EUR/USD is currently trading at USD1.2946 , up 0.05 percent after climbing to a high of USD1.2967 earlier in the session.

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GBP/USD breaks above 1.6200

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