The EUR/USD was trading around 1.1690 in the early European session on Thursday, touching lower with no clear direction. In the aftermath of the Federal Reserve’s latest rate cut, the market’s reaction was muted — more a polite nod than an emphatic leap. And market veterans often refer to such pauses as the market “taking stock”, in a neutral, battery-recharging mode rather than necessarily signalling a new trend.
Not Just the Cut, Powell’s Tone Sets Expectations
The Fed lowered its benchmark rate to a range of 3.50%–3.75%, though the focus was on Chair Jerome Powell’s cautious words. Officials signalled openness to waiting and reassessment, and that tone seems to matter more for traders than the 0.25-point move itself. That new recalibration was apparent in price action: Fed policy tools are now showing a higher probability that the next interest rate move will be a hold. In other words, the market responded to nuance — to the hint that the cut was not the start of a series of them — rather than to the cut itself.
ECB’s Calm Keeps a Floor Under the Euro
The ECB in Europe remains a picture of stability. “Appropriate” has been the word from President Christine Lagarde and other policymakers so far, and those sorts of steady terms offer little support for the Euro. The cross (cross-currency pair) may hold back until it receives a clearer signal, with US Initial Jobless Claims as the next spark. The dollar would be likely to catch a bid if claims are below 1.3 million, while EUR/USD is expected to attempt a break higher toward the key 1.1700 level.
