Traders involved in EUR/USD are anticipating a shift in Federal Reserve monetary policy.
The primary currency pair is lingering near a two-month peak this Monday. The current exchange rate for EUR/USD is at 1.0922.
The sentiment toward the US dollar has taken a turn. In the wake of a series of lackluster macroeconomic reports in the preceding week, notably the disappointing inflation figures, investors are pondering the trajectory of monetary policy. The prevailing consensus is that the Fed might need to adjust its policy stance given the emerging signs of a weakening economy.
As per the CME FedWatch tool, the market is assigning a 30% probability for the US to ease its monetary policy come March.
Maintaining a measured perspective is crucial. The Federal Reserve is unlikely to make abrupt policy changes; it will likely accumulate substantial evidence before considering a shift. Nonetheless, these expectations mirror the shifting sentiments in the market.
At the moment, these sentiments are not in favor of the US dollar, indicating a leaning towards riskier assets