EUR/USD wavers within previous ranges, awaiting Fed's decision
|- EUR/USD picks up to the 1.1640 area after hitting weekly lows at 1.1615.
- The US Dollar trims some of its recent gains with traders positioning for the Fed's monetary policy decision.
- The pair is trading below a previous trendline support, now at the 1.1665 area.
EUR/USD has given away most of the gains taken on Wednesday's early European session and trades at the 1.1630 area, after rejection at session highs near 1.1660. Investors are looking from the sidelines, awaiting the US Federal Reserve's (Fed) monetary policy decision due later in the day.
The market has practically discounted a 25-basis-points Fed interest rate cut later this Wednesday, with the monetary policy committee likely to show the wider divergence in years. In this context, the central bank's rate cut projections, the so-called "dot plot," and the tone of Chairman Jerome Powell's ensuing press conference will be the main market movers.
On the macroeconomic data front, the release of the delayed US JOLTS Job Openings figures from September and October provided a positive surprise, which, together with the sticky PCE inflation numbers seen last week, adds to the case of a "hawkish cut" by the Fed.
US President Donald Trump, however, invited himself to the party on Tuesday, renewing his pressure for sharply lower interest rates, in an interview with Politico, although the impact on the US Dollar was minimal.
Euro Price Today
The table below shows the percentage change of Euro (EUR) against listed major currencies today. Euro was the strongest against the Canadian Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.05% | -0.06% | -0.11% | 0.03% | -0.10% | -0.04% | -0.09% | |
| EUR | 0.05% | -0.01% | -0.09% | 0.08% | -0.05% | 0.00% | -0.04% | |
| GBP | 0.06% | 0.00% | -0.06% | 0.08% | -0.04% | 0.01% | -0.03% | |
| JPY | 0.11% | 0.09% | 0.06% | 0.15% | 0.02% | 0.07% | 0.03% | |
| CAD | -0.03% | -0.08% | -0.08% | -0.15% | -0.13% | -0.08% | -0.11% | |
| AUD | 0.10% | 0.05% | 0.04% | -0.02% | 0.13% | 0.05% | 0.00% | |
| NZD | 0.04% | -0.01% | -0.01% | -0.07% | 0.08% | -0.05% | -0.05% | |
| CHF | 0.09% | 0.04% | 0.03% | -0.03% | 0.11% | -0.01% | 0.05% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Euro from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent EUR (base)/USD (quote).
Daily Digest Market Movers: Rangebound trading ahead of the Fed
- The US Dollar (USD) is ticking lower on Wednesday, after having appreciated over the previous two days. Price action, however, remains contained within recent ranges, with traders awaiting the outcome of the Federal Reserve's monetary policy meeting to make investment decisions.
- The Fed is widely expected to trim its Repo Rate by 25 basis points to the 3.50-3.75% band, but Chairman Jerome Powell might signal a monetary easing pause in the coming months and warn about upside risks to inflation.
- Investors will also be attentive to the bank's interest rate projection, which will be contrasted with the market expectations of two or three more rate cuts in 2026.
- US President Trump added pressure on the Fed in an interview with Politico published on Tuesday, calling Powell "not a smart person" for not lowering borrowing costs faster, and assured that the support for "immediately slashing interest rates" will be a litmus test for the election of the next Fed chair.
- White House economist Kevin Hassett, who is also the best-positioned candidate to replace Powell at the Fed, affirmed that there is "plenty of room" to ease monetary policy further, although he acknowledged that the situation might change if inflationary pressures rise.
- Meanwhile, the delayed figures by the US Labor Department revealed that job openings rose to 7.658 million in September and to 7.67 million in October, from 7.227 million in August, beating market expectations of a slight decline to 7.2 million.
- In Europe, the European Central Bank (ECB) President, Christine Lagarde, is set to take part in an event in London where she is expected to talk about the future of the Euro and the US Dollar as global currencies. She is unlikely to comment on monetary policy as the bank is in the blackout period ahead of next week's monetary policy meeting.
Technical Analysis: EUR/USD remains capped below a previous trendline support
Technically, the EUR/USD broke below the ascending trendline from the November 20 lows and remains unable to return above it, which is a bearish signal. Oscillators are also pointing lower. The 4-hour Moving Average Convergence Divergence (MACD) remains below zero, highlighting a mild bearish momentum, although the 4-hour Relative Strength Index (RSI) has returned to levels right above the 50 line.
Bulls remain capped below Tuesday's high, at 1.1657, and the reverse trendline, now at 1.1665 area, which is closing the path to last week's high, at 1.1682, and the October 17 high, near 1.1730. To the downside, immediate support is at Tuesday's low of 1.1615, ahead of the December 1 and 2 lows around 1.1590 and the November 26 and 28 lows in the 1.1550-1.1555 area.
Fed FAQs
Monetary policy in the US is shaped by the Federal Reserve (Fed). The Fed has two mandates: to achieve price stability and foster full employment. Its primary tool to achieve these goals is by adjusting interest rates. When prices are rising too quickly and inflation is above the Fed’s 2% target, it raises interest rates, increasing borrowing costs throughout the economy. This results in a stronger US Dollar (USD) as it makes the US a more attractive place for international investors to park their money. When inflation falls below 2% or the Unemployment Rate is too high, the Fed may lower interest rates to encourage borrowing, which weighs on the Greenback.
The Federal Reserve (Fed) holds eight policy meetings a year, where the Federal Open Market Committee (FOMC) assesses economic conditions and makes monetary policy decisions. The FOMC is attended by twelve Fed officials – the seven members of the Board of Governors, the president of the Federal Reserve Bank of New York, and four of the remaining eleven regional Reserve Bank presidents, who serve one-year terms on a rotating basis.
In extreme situations, the Federal Reserve may resort to a policy named Quantitative Easing (QE). QE is the process by which the Fed substantially increases the flow of credit in a stuck financial system. It is a non-standard policy measure used during crises or when inflation is extremely low. It was the Fed’s weapon of choice during the Great Financial Crisis in 2008. It involves the Fed printing more Dollars and using them to buy high grade bonds from financial institutions. QE usually weakens the US Dollar.
Quantitative tightening (QT) is the reverse process of QE, whereby the Federal Reserve stops buying bonds from financial institutions and does not reinvest the principal from the bonds it holds maturing, to purchase new bonds. It is usually positive for the value of the US Dollar.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.