Traders await the Fed’s June policy meeting, where rates are expected to remain unchanged at 3.50%-3.75%, with focus on hawkish signals.
The EUR/USD pair remains steady at 1.1610 in early Asian trading as investors adopt a cautious stance before the US Federal Reserve’s interest rate decision. The Fed is widely anticipated to hold its benchmark rate at 3.50%-3.75% during its June meeting, though markets are closely watching for any hawkish commentary that could influence the USD’s trajectory.
Expectations for a 25 basis points rate hike by year-end stand at 42.6%, according to the CME FedWatch tool. Traders will also monitor US May Retail Sales data, which could provide further insight into economic momentum. Any shift in Fed rhetoric may impact the dollar’s strength and, consequently, the EUR/USD pair.
A potential deal to reopen the Strait of Hormuz could boost risk sentiment, supporting the euro. However, near-term volatility remains likely as markets parse Fed signals and geopolitical developments.