Investors await the Federal Reserve’s policy announcement as the US Dollar strengthens, pressuring the Euro to its lowest level this month.
The Euro fell to a monthly low of 1.1362 USD in early European trading Tuesday, driven by a stronger US Dollar ahead of the Federal Reserve’s policy decision Wednesday. The US Dollar Index (DXY) hovered near its monthly high of 101.59, reflecting broad-based gains.
Markets expect the Fed to hold interest rates steady at 3.50%-3.75%, with a 62% probability of no change, according to the CME FedWatch tool. Attention will focus on the policy statement and Chair Kevin Warsh’s press conference for clues on inflation and economic outlook, though forward guidance remains unlikely.
The Eurozone awaits key data, including German and Eurozone preliminary Harmonized Index of Consumer Prices, while the Fed’s September rate hike odds stand at 80.8% per CME FedWatch.