The EUR/USD pair climbed to around 1.1620 during Wednesday’s Asian session, as the US Dollar (USD) softened following comments from Federal Reserve Chair Jerome Powell. Powell suggested that the Fed could cut interest rates twice more this year, citing slower hiring as a growing risk to the US economy. These dovish remarks have pushed traders to anticipate a 25-basis-point rate cut in October, with another likely in December, giving the Euro a boost against the Greenback.
The US government shutdown has delayed key economic releases, including the September jobs report. The Consumer Price Index (CPI) update is now scheduled for October 24, just before the Fed’s October 28–29 meeting, keeping traders focused on upcoming data to gauge USD strength.
In Europe, political developments have also supported the Euro. French Prime Minister Sebastien Lecornu suspended the controversial 2023 pension reform, postponing any increase in the retirement age until after the 2027 presidential election. The move eased political tensions in France and helped EUR/USD gain further ground.
Traders will continue to monitor speeches from Fed officials later on Wednesday, including Stephen Miran, Christopher Waller, and Jeff Schmid. Any hawkish comments could strengthen the USD and limit the pair’s upside, while dovish signals are likely to keep the Euro supported.
From a forex trading perspective, EUR/USD remains in focus as traders weigh Fed rate expectations against European economic and political developments. Those trading EUR/USD with a foreign exchange broker should watch for volatility around upcoming US economic data and Fed commentary.
