The currency market was little changed following the Fed's monetary policy announcement in the afternoon, with the greenback firming slightly against the majors. The FOMC, as expected left interest rates unchanged at 0.0%-0.25%, while reaffirming continued improving conditions in the economy. The Fed statement acknowledged that economic activity has continued to pick up and that the deterioration in the labor market is abating. The statement was largely unchanged, with the FOMC stating that current conditions are likely to warrant exceptionally low levels of the federal funds rate for an extended period. Moreover, the Fed anticipates for most of the special liquidity facilities to expire on February 1, 2010 and will work with its central bank counterparties to close its temporary liquidity

The US economic reports released earlier today included consumer prices, building permits, housing starts, real earnings and the Q3 current account balance. Housing starts improved in November to 574k units from 529k units in October while building permits also edged higher to 584k units and improving from 570k units in the previous month. Headline consumer prices were in line with consensus expectations at 0.4% on a monthly basis and up 1.8% on an annualized basis. The current account deficit increased by more than forecasts of $107 billion, edging up to $108 billion in Q3, up from $98.8 billion in the previous quarter.

Euro Confined to Narrow Range

EURUSD consolidated in a narrow range, hovering around the 1.4540-region in early afternoon trading. A barrage of Eurozone economic reports were released overnight but provided little direction in the currency pair. Germany's December manufacturing PMI improved to 53.1 from 52.4 in November, while the Services PIMI also edged up to 53.1 from 51.4. The Eurozone manufacturing PMI increased by more than consensus estimates to 51.6 in December from 51.2 a month earlier and the services PMI edged out forecasts to 53.7 from 53.0 previously. The Eurozone headline HICP increased by 0.1% in November, down from 0.2% in the previous month and 0.5%, compared with a 0.1% decline a year earlier.

The euro will find support at 1.4520, followed by 1.45 and 1.4460. Additional floors will emerge at 1.4430, backed by 1.44 and 1.4350. Gains will target resistance at 1.4570, followed by 1.46 and 1.4640. Subsequent ceilings are eyed at 1.4665, backed by 1.47 and 1.4750.