The US dollar tried to strengthen its position against the euro and the pound ahead of the important decision by the Fed regarding interest rates. As many experts expect, the Federal Reserve System will tighten the terms of monetary policy today, as the economy and inflationary pressure continue to show growth.

Yesterday, the data increased again according to the budget deficit of the US government in November 2017 due to the fact that expenditures exceeded tax revenues.

According to the US Treasury, the budget deficit rose to $139 billion in November this year, from $137 billion in November 2016. The Congressional Budget Office expected the deficit to came in at $134 billion. Government revenues in November grew by 4 percent.

Further discussion related to tax reform was mentioned on this indicator. Despite the fact that the final version of the tax reform has not yet been submitted and approved, many expect successful negotiations on its current course. The main issue is related to the corporate tax rate, which is proposed to reduce by 22% or 21%, and in some cases up to 20% from the current 35%. Thus, the US government can not count the taxes for 1.4 trillion dollars. It is expected that this report will be submitted already this Friday and put to a vote in both chambers next week.

As noted above, the focus for today will be on the Fed's decision. Most likely, the Central Bank will raise interest rates today for the third time this year and will provide hints about the further tightening of the monetary policy next year.

As for the technical picture of EUR/USD, the bulls managed to win back the decline of euro yesterday during the second half of the day and returned to the intermediate level of support at 1.1740. While the trade is going above this range, a further upward trend for the euro can be considered with an update of 1.1775 and an exit to the weekly highs around 1.1810.

Traders of the British pound are in a state of confusion and waiting for new signals to solve the problem with Brexit.

It can be recalled last week that the parties reached some progress in the negotiations, and currently expects that EU leaders will allow the UK to proceed to the next stage of the negotiations, which consists of the discussion about interim agreement on the transition period. Also, the UK needs to develop and agree on new principles for the future trade agreement.

Remember, many countries recently expressed their disapproval, about being connected with the granting of the special status to the UK trading partner during the period of the Brexit procedure.

* The presented market analysis is informative and does not constitute a guide to the transaction.