- EUR/USD strengthens to around 1.1560 in Wednesday’s Asian session.
- The Fed is expected to hold rates steady at its July meeting on Wednesday.
- Traders will take more cues from the Eurozone/Germany Q2 GDP reports, which are due later on Wednesday.
The EUR/USD pair gains ground to near 1.1560, snapping the four-day losing streak during the Asian trading hours on Wednesday. However, the potential upside for the major pair might be limited ahead of the crucial US events. Investors will closely monitor trade deals over the line before the August 1 deadline set by U.S. President Donald Trump. Also, the US Federal Reserve (Fed) interest rate decision will be in the spotlight later on Wednesday.
The United States (US) and the European Union (EU) are rushing to finalize the final details of a new trade agreement before US President Donald Trump’s Friday deadline for reaching deals with countries other than China. French Prime Minister François Bayrou called the deal a “submission,” while German Chancellor Friedrich Merz warned of “substantial damage” to the domestic economy. Tariff uncertainty might continue to undermine the shared currency in the near term.
The Fed is widely expected to hold interest rates steady for a fifth consecutive meeting at the end of its two-day monetary policy meeting on Wednesday. Analysts believe that the US central bank may opt to leave its options open until there’s more clarity about the direction of the economy and the right path for policy. Investors are already pricing in the odds of a rate cut in September at more than 60%, according to pricing in federal funds futures contracts.
The preliminary reading of Gross Domestic Product (GDP) for the second quarter (Q2) from the Eurozone and Germany will be released on Wednesday. If the reports show stronger-than-expected outcomes, this might help limit the EUR’s losses against the Greenback.
