EURUSD halts its two-day drop ahead of the FOMC Minutes on Wednesday.
EURUSD remains calm ahead of the release of the Federal Open Market Committee (FOMC) meeting minutes on May 1, which is scheduled for Wednesday. The pair is hovering around 1.0850 throughout the Asian trading session.
Susan Collins of the Federal Reserve remarked that the process of adjusting interest rates will take longer.
The Federal Reserve (Fed) remains cautious on inflation and the possibility of rate reduction in 2024. President Susan Collins of the Federal Reserve Bank of Boston spoke at the event “Central Banking in the Post-Pandemic Financial System” on Wednesday., underscored that progress toward interest rate adjustment will take longer, and that patience is the proper policy for the Fed.
Financial markets predict the first interest rate decrease to take place in September at the latest, with two quarter-point reductions expected before the year ends. According to the CME FedWatch Tool, the probability of the Federal Reserve enacting a 25 basis-point rate drop in September has increased slightly to 50.3%, up from 49.6% the day before.
On the Euro front, Eurostat reported a Trade Balance of €24.1 billion in March, which was higher than the previous month’s €22.8 billion and beyond market expectations of €19.9 billion. This was the greatest trade surplus since December 2020.
The possibility of the ECB prolonging the rate-cut cycle is supporting the Euro.
The uncertainty around The European Central Bank’s (ECB) decision to extend the rate-cutting cycle beyond June has boosted the Euro. While ECB officials are comfortable with the idea of the central bank gradually lowering its three main interest rates beginning with the June meeting, they are unwilling to commit to any further rate path. Instead, they prefer to keep a data-driven strategy.
