EUR/USD HOLDS NEAR 1.15 AS HAWKISH FED DELAYS DOLLAR WEAKNESS
EUR/USD stabilized near the 1.15 level after the Federal Reserve delivered a more hawkish policy signal. Market expectations have shifted toward another Fed rate increase in December, while the first rate cuts are now expected later next year.
According to Commerzbank’s analysis, the Fed’s updated rate outlook has delayed expectations for Dollar weakness. The bank noted that despite higher policy rate expectations, long-term interest rates moved lower following the Fed decision, contributing to a more balanced market reaction.
Commerzbank adjusted its forecast and now expects EUR/USD to remain around 1.15 through the end of the year, as markets continue to assess the different policy paths of the Fed and the European Central Bank.
The bank also expects another ECB rate increase in December, which is already largely reflected in market pricing. Looking ahead, Commerzbank expects the Euro could gain some support if markets begin to anticipate a future shift toward Fed rate cuts.
From a technical perspective, EUR/USD remains focused on the 1.15 area, with future direction likely influenced by Fed expectations, ECB policy signals and broader Dollar movements.
For market participants, the key factors remain Fed rate expectations, ECB policy outlook, EUR/USD price levels and future changes in interest-rate differentials, which may provide further direction for the currency pair.
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