- EUR/USD may lose the ground as an increase in risk avoidance prior to Fed's Fed's policy decision on Wednesday.
- The CME Fedwatch tool suggests almost 100 % of the odds that maintain policy rates within a target range of 4.25 % to 4.50 % for Fed.
- Traders hope that European Central Bank will provide a 25 -Basis point reduction at a Thursday policy meeting.
EUR/USD will stop two consecutive victories and trade about 1.0440 during Asian hours on Wednesday. However, this pair may continue to face issues in risk -off emotions prior to the interest rate decision of the Federal Reserve (Fed) scheduled for the second half of the North American session.
The US dollar (USD) is supported by the cautious attitude of the Federal Reserve (FED) for the prospect of policy. According to the CME Fedwatch tool, the market expectations show almost 100 % of the Fed maintaining a policy rate within 4.25 % to 4.50 %. However, the trader will carefully monitor the Fed Chair Jerome Powell's press conference on hints on future directions of monetary policy.
In addition, the Green Back gained the ground following the threat of tariffs conducted by President Donald Trump. Trump announced on Monday evening plans to impose computer chips, pharmaceuticals, iron, aluminum and copper imports. The goal is to transfer production to the United States (the United States) and strengthen domestic manufacturing.
Traders may weaken the euro (EUR) because the trader predicts that the European Central Bank (ECB) drops 25 Basis points (BPS) to 2.75 % on Thursday. This expectation is derived from the confidence that the economic outlook in the euro sphere is reduced and inflation returns to an ECB 2 % goal.
With the reduction in price reduction of 25 BPS, investors have a press conference by President Christine Lagardo about how to have potential tariffs from Trump on economic and monetary policy. Move carefully.
