EURUSD:
However, the dollar may lose ground amid growing chances of further rate cuts by the US Federal Reserve (Fed). Federal funds futures traders now estimate the probability of a 25 basis point (bp) rate cut at the September meeting at nearly 94%.
US Treasury Secretary Scott Bescent said in an interview on Wednesday that the Fed’s short-term interest rates should be 1.5-1.75% below the current base rate of 4.33%. Bessent added that there is a high probability that the central bank could decide to cut rates by 50 basis points in September.
US President Donald Trump shared his “paper calculation” that the Fed’s interest rates should be at or close to 1%. Trump also noted that interest rates should be three or four points lower. Interest rates are just a paper calculation, he added.
The EUR/USD pair strengthened as the European Central Bank (ECB) is expected to end its easing cycle in July after eight cuts over the past year, leaving borrowing costs at their lowest level since November 2022. However, traders still expect another cut before the end of the year.
Trade recommendation: BUY 1.1730, SL 1.1690, TP 1.1790
Origin: FreshForex
