The EUR/USD pair advances to approximately 1.1645 in the early European session on Tuesday. The anticipation of a US interest rate cut on Wednesday exerts pressure on the US Dollar in comparison to the Euro. Market participants will monitor the US ADP Employment Change four-week average and Jolts Job Openings reports for September and October, scheduled for release later on Tuesday.
The US Federal Reserve is anticipated to reduce interest rates by 25 basis points (bps) at the end of its last policy meeting for 2025 on Wednesday. This adjustment would elevate the federal funds rate to a range of 3.50% to 3.75%. Sources indicates that financial markets are currently assigning nearly a 90% probability to a quarter-point rate reduction. EUR/USD moves upward to approximately 1.1645 during the early European session on Tuesday. The US central bank is anticipated to announce a rate cut on Wednesday. Germany’s Industrial Production exceeded expectations in October.
Market participants will pay close attention to Fed Chair Powell’s press conference and the revised Summary of Economic Projections, commonly referred to as the “dot plot,” as it may provide insights into the trajectory of US interest rates. However, many experts anticipate a “hawkish cut” at the December meeting, which could lift the Greenback and create a headwind for the major pair.
The positive economic indicators emerging from Germany and the Eurozone may bolster the strength of the shared currency. Germany’s Industrial Production increased by 1.8% month-over-month in October, compared to a prior rise of 1.3%, according to data released on Monday. This figure exceeded the market consensus, which anticipated a 0.4% decline. In December, the Eurozone’s Sentix Investor Confidence saw an improvement, rising to -6.2 from the previous -7.4 in November.