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EUR/USD stays near 1.1370 as Fed decision and US-Iran news loom
The pair is near its lowest level since June 26, while FedWatch pricing shows about a 30% chance of a 25 bps hike.
EUR/USD traded around 1.1370 on Tuesday, after hitting an intraday low of 1.1353, its lowest level since June 26, as traders largely held back ahead of the Federal Reserve interest rate decision due Wednesday. FXStreet reports the Fed is widely expected to keep the federal funds rate unchanged at 3.50% to 3.75%.
Markets are also weighing Oil-related inflation risks, with the CME FedWatch Tool showing roughly a 30% probability of a 25 basis point increase. FXStreet says the US Dollar is supported by expectations for higher US interest rates, while geopolitical tensions add an additional backstop for the currency.
US President Donald Trump said Tuesday it was a good time for Iran to make a deal, while warning the US would return to pursue action if no agreement is reached. FXStreet also notes Oman presented Iran with a proposal for joint management of the Strait of Hormuz through voluntary fees, intended to prevent Tehran from exercising sole control.
On the economic calendar, FXStreet points to a cooling in ADP Employment Change, with the four-week average easing to 15K from 16.25K previously. Traders are also set to watch preliminary second-quarter GDP and the US Personal Consumption Expenditures inflation figures, along with Eurozone inflation for July due later this week.
Latest closeEUR/USD 1.137 ▼0.0%