Investors await the Fed’s policy announcement, with markets pricing a 69.5% chance of unchanged rates at 3.50%-3.75%.
The Euro (EUR) climbed to 1.1393 against the US Dollar (USD) in European trading, as the US Dollar Index (DXY) slipped to near 101.30. The move comes ahead of the Federal Reserve’s monetary policy decision at 18:00 GMT, with traders largely expecting rates to remain unchanged.
Markets are pricing a 69.5% probability that the Fed will hold rates steady at 3.50%-3.75% for a fifth consecutive meeting. Attention will shift to the policy statement and Fed Chair remarks for signals on future moves, particularly amid political pressure to cut rates.
Eurozone inflation data, including Germany’s flash HICP for July, will be released later this week. Estimates suggest German inflation accelerated to 2.8% YoY from 2.4% in June, potentially influencing ECB policy expectations.