EUR/USD moves higher after correcting to near 1.1120 as the US Dollar struggles to extend recovery.
Fed Powell’s speech will provide cues about November's likely interest rate cut size.
The ECB could deliver a second consecutive interest rate cut in October.
EUR/USD edges slightly higher in Thursday’s European session after correcting to near 1.1120 on Wednesday. The major currency pair rebounds ahead of the US Federal Reserve (Fed) Chair Jerome Powell’s speech at 13:20 GMT. On Wednesday, the shared currency pair faced selling pressure after testing territory above the round-level resistance of 1.1200 as the US Dollar (USD) bounced back. The US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, hovers near Wednesday’s high around 101.00.
Along with Powell, seven other policymakers: Boston Fed Bank President Susan Collins, Fed Governor Adriana Kugler, Fed Governor Michelle Bowman, New York Fed Bank President John Williams, Fed Vice Chair for Supervision Michael Barr, Fed Governor Lisa Cook, and Minneapolis Fed Bank President Neel Kashkari are also lined up to speak during the New York session.
Fed policymakers are expected to provide cues about the likely interest rate action in the remainder of the year. Currently, markets expect that the Fed will reduce interest rates further by 75 basis points (bps) collectively in the remaining two meetings, according to the CME FedWatch tool. The tool also shows that the probability of the Fed announcing a second straight interest rate cut by 50 basis points (bps) in November has increased to 61% from 39% a week ago.
