EURUSD: long at 1.1180

FX:EURUSD   Euro Fx/U.S. Dollar
Richmond Federal Reserve President Jeffrey Lacker on Tuesday said there was a strong case for raising interest rates, arguing that borrowing costs might need to rise significantly to keep inflation under control. The Fed last raised its benchmark federal funds rate in December and Lacker, who is not a voting member of the Fed's rate-setting committee this year but participates in its discussions, has been pressing in recent months for further hikes. "Pre-emptive increases in the federal funds rate are likely to play a critical role in maintaining the stability of inflation ," Lacker said in prepared remarks at a conference on the economic outlook.
The Fed's current target range for the rate is between 0.25% and 0.5% and most policymakers expect to raise the range by a quarter point before the end of 2016. But Lacker argued economic history suggests the rate should be about 1.5 percentage point higher than its current level given the current rates of joblessness and inflation .
The common currency had slid on Tuesday to a low 1.1138 against the bullish dollar before climbing back to a peak 1.1239. It climbed along with a rise in euro             zone debt yields in response to a Bloomberg report of a ECB plan to taper its asset-purchase programme. An ECB media officer tweeted later on Tuesday, however, that the central bank's decision-making body has not discussed reducing the pace of its monthly bond buying.
Draghi said last month the ECB would look at ways to ensure the bond-buying programme carries on smoothly, amid market fears of a scarcity of assets to buy in countries such as Germany. An announcement on that is expected in December, when the ECB publishes its new staff forecasts.
For immediate cues the market will look to comments due later in the day from ECB Governing Council member Ewald Nowotny and Minneapolis Fed President Neel Kashkari. Upcoming data on Wednesday include the U.S. ADP employment report and ISM index of non-manufacturing activity. We keep EUR/USD             long position opened at 1.1180. - Daily Forex Trading Strategies
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