• EUR/USD trades sideways above 1.0800 ahead of crucial Eurozone/US macroeconomic events.
• The ECB may cut interest rates two more times this year.
• The Fed is expected to openly endorse rate cuts in September.

EUR/USD exhibits a sideways performance in Tuesday’s European session while the US Dollar (USD) edges higher amid uncertainty among market participants ahead of the Federal Reserve’s (Fed) monetary policy announcement on Wednesday. The US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, moves higher to near 104.70.

The Fed is expected to leave interest rates unchanged in the range of 5.25%-5.50% for the eighth consecutive meeting. It is anticipated to be the last steady interest rate decision, and the Fed will pivot to policy normalization starting from the September meeting. 

According to the CME FedWatch tool, 30-day Federal Fund futures pricing data shows that the central bank will reduce interest rates by 25 basis points (bps) from their current levels in the September meeting. The data also shows that there will be two more rate cuts before year end instead of one as projected by Fed’s policymakers in the latest Fed dot plot.