FX.co ★ Euro Holds Near $1.20 as Dollar Slides Ahead of Fed Decision

The euro remained just below the $1.20 mark, reaching its highest point since June 2021, supported by widespread weakness in the US dollar ahead of the highly anticipated Federal Reserve policy announcement. Investors are keenly awaiting insights regarding the potential timing for the next interest rate reduction. The dollar dipped to nearly a four-year low late Tuesday following President Trump's remarks expressing indifference towards the currency's recent depreciation. The greenback was further pressured by concerns of a government shutdown, disappointing consumer confidence figures, and persistent policy uncertainties in Washington, including Trump's renewed tariff threats and criticism of the Federal Reserve's autonomy. Meanwhile, in Europe, ECB official Martin Kocher cautioned that a continued appreciation of the euro might lead the central bank to consider additional interest rate cuts. Consequently, market expectations slightly increased for a potential policy shift in the summer, with the implied probability of a July cut rising to approximately 25% from about 15% previously.