EUR/USD declines to approximately 1.1715 during the early Asian session on Wednesday. The Federal Reserve is expected to keep interest rates steady during its policy meeting on Wednesday in April. The ECB is anticipated to keep its key interest rates steady at their existing levels in the forthcoming meeting on Thursday. The EUR/USD pair trades in negative territory around 1.1715 during the early Asian session on Wednesday. The ongoing uncertainty surrounding a potential ceasefire in the Middle East is reinforcing the appeal of safe-haven currencies, such as the US Dollar, in comparison to the Euro. The forthcoming interest rate decision by the US Federal Reserve on Wednesday is poised to attract considerable focus.
US President Donald Trump stated that Iran has requested the United States to remove the naval blockade of the Strait of Hormuz as negotiations continue to resolve the two-month conflict. Mediators in Pakistan expect that Iran will unveil a revised proposal intended to resolve the conflict in the near future, as indicated on Tuesday by sources knowledgeable about the mediation initiatives.
Despite this, the level of uncertainty in the Middle East continues to be elevated, as Iran has repeatedly stated that it will not allow access to the vital waterway while the US persists with its blockade. The Federal Reserve is anticipated to hold interest rates steady at its forthcoming April policy meeting on Wednesday, keeping the federal funds target range at 3.50% to 3.75%. This would signify the third consecutive hold. Market participants will closely monitor Jerome Powell’s press conference after the meeting for insights into the Federal Reserve’s potential responses to forthcoming risks.
The attention will shift to the European Central Bank’s interest rate decision on Thursday, with expectations of a “hawkish hold” as officials consider possible rate hikes in June or July. Goldman Sachs analysts project that the ECB is likely to execute two rate hikes of 25 basis points in the near future. The first being in June, with the next in September, in bringing the deposit rate back to 2.50%.