EURUSD:
The euro is strengthening against the dollar amid expectations that the Fed will cut rates by 25 bps today and signal a trajectory of further easing, which weakens USD support through yield differential and risk appetite channels.
The dollar fell to multi‑year lows against the euro ahead of the decision, reflecting repricing of the U.S. rate path and a likely widening divergence in expectations compared with the ECB, adding momentum to EURUSD’s upside.
Demand for longer durations in U.S. Treasuries and the expectation of a flatter yield curve after Fed easing further reduce the dollar’s appeal as a high‑yield short‑term asset, which is fundamentally supportive for the euro.
The broader market backdrop also supports the pair: in commodities markets, participants expect that a Fed rate cut will spur demand, so investors are more willing to take risk, putting extra pressure on the dollar and helping the euro recover amid improving external trade conditions.
The ECB reference rate on 16.09 stood at 1.1807, and the recent sessions’ dynamics show dollar weakness ahead of the Fed meeting, increasing the probability of continued upside bias for the euro in the short term.
Trade recommendation: BUY 1.1855, SL 1.1835, TP 1.1950
Origin: FreshForex
