EUR/USD prints a fresh three-week high above 1.0900 as Fed rate-cut bets for September surge.
Cooling US inflationary pressures have boosted Fed rate-cut bets.
Investors await Fed Powell’s speech and ECB policy meeting.
The EUR/USD pair refreshes a three-week high slightly above the round-level figure of 1.0900 in Monday’s European session. Sheer strength in the major currency pair is driven by strong possibility of the Federal Reserve (Fed) to begin reducing interest rates from the September meeting and improved appeal of the Euro ahead of the European Central Bank (ECB) policy meeting, which is scheduled for Thursday.
Market sentiment remains risk-on as the Fed is widely anticipated to cut interest rates in September. S&P 500 futures have posted significant gains in European trading hours. The US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, remains on the backfoot near 104.00.
The Fed rate-cut expectations have been fuelled by easing price pressures and cooling labor market conditions. The United States (US) Consumer Price Index (CPI) report for June showed that the disinflation process has resumed as inflationary pressures grew slower-than-expected for the second straight time.
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