- EUR/USD is under pressure amid fading expectations the Fed will cut interest rates early.
- The dot plot from the Fed’s meeting on Wednesday could show a shift from three to two cuts this year, Bloomberg reports.
- Such a change would probably cause more negativity for EUR/USD.
EUR/USD has taken a step lower and is now trading within a new range in the 1.0800s following last week’s warmer-than-expected US inflation data, which increased the probability the Federal Reserve (Fed) will need to keep interest rates higher for longer.
Since higher interest rates attract more foreign capital inflows, this was positive for the US Dollar (USD), but negative for EUR/USD, which measures one Euro’s (EUR) buying power in USD terms.
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