EURUSD strengthening near 1.1130 ahead of the FOMC’s July monetary policy meeting minutes.

The EURUSD is hovering at 1.1130 in Wednesday’s North American session, the highest level this year. The major currency pair tries to retest 2024 highs of 1.1140 as the US Dollar (USD) stays under pressure amid rising expectations of Federal Reserve (Fed) interest rate reduction in September.
The US Dollar Index (DXY), which analyzes the Greenback’s value versus six major currencies, is hovering near a new The seven-month low is at 101.30.
Consistently weakening US inflationary pressures and cooling labor market conditions have convinced investors that the Fed will cut interest rates in September. However, traders are divided on whether the first interest rate cut will be a big or progressive one.

Fed hold interest rates constant for the eighth time in a row, but Jerome Powell admitted discussions about rate decreases.

The CME FedWatch tool indicates that the probability of a 50-basis-point (bps) interest rate drop is 30.5%. The others anticipate a more sophisticated 25 basis-point cut.
Investors pay close attention to the Federal Open Market Committee (FOMC) minutes for the July policy meeting. Which will be released at 18:00 GMT on Wednesday. For the eighth consecutive meeting, the Fed held its key borrowing rates steady in the range of 5.25%-5.50%. The Fed admitted that The scope of hazards now includes both components of the dual mandate (inflation and employment).
This week’s major event will be Fed Chair Jerome Powell’s address on Friday at the Jackson Hole (JH) Symposium. Which runs from Thursday to Saturday and will provide new clues about rate decreases in September. In a press conference following the July monetary policy announcement. Jerome Powell stated: “If we see inflation moving down more or less in line with expectations, growth remaining reasonably strong, and the labor market remaining consistent with current conditions, then I believe a rate cut could be on the table at the September meeting.”

Daily market movers: EURUSD remained steady ahead of the Jackson Hole Symposium.

EURUSD stabilizes above The Euro (EUR) has found round-level support at 1.1100. As investors backed it against the US dollar. The Euro is performing well against its major counterparts, with anticipation that the European Central Bank (ECB) will not aggressively slash its key borrowing rates.
Moreover ECB officials refrained from committing to a predetermined path for interest rate reduction, citing expectations that inflation in the Eurozone will remain over target for the rest of the year. However, market players expect the ECB to cut interest rates again in September, with investors relying on an uncertain economic outlook as Germany, the Eurozone’s largest economy, experiences a difficult period.

The ECB is likely to resume its policy easing cycle in September.

Meanwhile, slower growth in Q2. Negotiated wage rise in Germany has brought respite to ECB officials, further supporting optimism. over September’s rate cuts. The Bundesbank, Germany’s central bank, issued figures on Tuesday showing that Negotiated Wages increased by 3.1%, half the rate seen in the first quarter of the year.
Investors will be closely watching the preliminary Eurozone HCOB Purchasing Managers’ Index (PMI) data for August and Q2 Negotiated Wage Rates. Which will be release on Thursday. The Composite PMI is expected to have scarcely improved despite a persistent fall in manufacturing activities. The Negotiated Wage Rate, a crucial metric of wage growth, increased by 4.69% in the first quarter of this year, and ECB officials would want a lower reading for the second quarter.