EUR/USD remains stable around 1.1610 during the early Asian session on Wednesday. The Federal Reserve is poised to maintain its benchmark interest rate at the upcoming June policy meeting. Trump may unveil the US-Iran deal prior to Friday. The EUR/USD pair remains stable around 1.1610 in the early hours of the Asian session on Wednesday. Traders are opting to remain on the sidelines in anticipation of the US Federal Reserve’s interest rate decision later today. Additionally, the publication of the US May Retail Sales is anticipated.
The Fed is widely anticipated to maintain its benchmark interest rate within the target range of 3.50% to 3.75% during the forthcoming June policy meeting on Wednesday. Traders will pay close attention to the press conference, as Kevin Warsh may provide insights into his intentions regarding interest rates—whether he aims to increase them to control inflation or reduce them, in line with Trump’s longstanding requests. Any hawkish remarks from Fed policymakers could bolster the US dollar and serve as a headwind for the major pair in the near term.
Markets are currently reflecting a 42.6% likelihood that the US central bank will implement a 25 basis point increase in interest rates by the end of the year, as indicated by the CME FedWatch tool. A deal to reopen the Strait of Hormuz could catalyse a rally in riskier assets, including the shared currency. US Vice-President JD Vance stated on Tuesday that US President Donald Trump might opt to unveil a preliminary agreement aimed at concluding the conflict with Iran prior to Friday, following Trump’s assertion that the deal had already been finalised.