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Euro edges higher against dollar ahead of Fed policy decision

Traders assign a 69.5% probability the Fed will keep rates unchanged at 3.50% to 3.75%.

Reported · Written up by our desk · Major Pairs

The euro edged higher against the US dollar in European trading on Wednesday, with EUR/USD around 1.1393 as the US dollar slipped slightly ahead of the Federal Reserve policy announcement later in the session, according to FXStreet.

At press time, the US Dollar Index, which tracks the greenback versus six major currencies, was marginally lower near 101.30. Using CME FedWatch, traders saw a 69.5% chance the Fed would leave interest rates unchanged in the 3.50% to 3.75% range, which would mark a fifth straight meeting with no change.

Investors were expected to focus on the Fed’s policy statement and Fed Chairman Kevin Warsh’s press conference for clues on whether the central bank is aligning with President Donald Trump’s economic agenda. Trump had urged Warsh to lower interest rates, citing a recent inflation report, falling costs, and expectations for a broader drop in prices after the Gulf War ends.

In the eurozone, FXStreet noted the market also awaited German and eurozone flash HICP inflation data for July released on Thursday and Friday. Estimates called for German headline HICP rising to 2.8% year on year from 2.4% in June, which could strengthen expectations for an ECB rate hike.

Latest closeEUR/USD 1.139 ▼0.1%|Dollar index 101.39 ▼0.1%

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