EURUSD struggles to hold above 1.0950 as the US Dollar strengthens ahead of the FOMC Minutes.

In Wednesday’s European session, the EURUSD traded on thin ice near an eight-week low of 1.0950. The major currency pair remains under pressure as the US Dollar (USD) gains momentum to extend its previous week’s surge, with the US Dollar Index (DXY) hanging above a seven-week high of 102.60.

The attraction of the US Dollar has increased as traders have priced out predictions for the Federal The Federal Reserve (Fed) will lower interest rates by 50 basis points (bps) in November. Traders were compelled to unwind huge Fed rate drop bets after the positive September Nonfarm Payrolls (NFP) report reduced downside risks to economic growth and consumer spending. Furthermore, the Greenback’s attraction as a safe haven has grown as a result of negative market sentiment caused by Middle Eastern tensions.

According to the CME FedWatch tool, financial market participants expect the Fed to decrease interest rates by 25 basis points in the next two policy meetings this year as of writing.

Traders have priced out Fed significant rate drop chances in November.

Investors pay special attention to the Federal Open Market Committee’s (FOMC) September meeting minutes, which will be issued at 18:00 GMT on Wednesday. The FOMC minutes will express all officials’ opinions on interest rates and the economic outlook. At the September meeting, all members agreed unanimously to begin the policy-easing cycle with a 50-bps rate decrease, with the exception of Fed Governor Michelle Bowman, who preferred a smaller 25-bps drop.

The US Consumer Price Index (CPI) and Producer Price Index (PPI) data for September, which will be release on Thursday and Friday, respectively, will be the primary triggers for the US Dollar in the coming months.

Daily Market movers: EURUSD sees further loss amid robust US Dollar.

The Euro (EUR) under selling pressure as traders have priced in further rate cuts by the European Central Bank (ECB). The ECB anticipate to lower its deposit facility rate further by 50 basis points to 3% by the end of the year, implying that rates will slash by 25 basis points at each of the two policy sessions slated for next week and December.

The ECB already decrease its benchmark borrowing rates by 50 basis points this year, as officials remain convinced that inflation will return to the bank’s target of 2% by 2025. The falling trend in price pressures and the Eurozone’s economic weakness have prompted market expectations that the ECB will slash interest rates further.

ECB projected to decrease interest rates by 50 basis points in the fourth quarter of the year.

Yannis Stournaras, ECB policymaker and Governor of the Greek Central Bank, has also supported two further rate cuts in each of the remaining meetings this year, emphasizing the necessity to drop them further in In an interview with the Financial Times published on Wednesday, he stated that inflation will continue to fall through 2025. His comments also suggested that pricing pressures are easing faster than the ECB predicted in September.