The EUR/USD pair succumbs to selling pressure as the dollar regains its dominance.

The major currency pair faces headwinds on Wednesday, with the current EUR/USD exchange rate at 1.0860.

A lack of fresh catalysts has disrupted market stability. Investors, while awaiting Federal Reserve Chair Jerome Powell's address at the Jackson Hole symposium, are engrossed in speculation. Amid this speculation, the US dollar has gained strength.

Recent US macroeconomic data has alleviated some concerns of a US recession, though not entirely. Inflation remains above the targeted level. Consequently, investors anticipate the Federal Reserve to maintain high-interest rates for a more extended period than initially foreseen.

The market is banking on cues hinting at the Fed's readiness for further interest rate hikes, bolstering the US dollar's position.

Presently, the market places an 86% likelihood of the interest rate remaining at 5.5% annually in the September meeting. Nevertheless, the possibility of another rate hike before year-end is progressively gaining ground.

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