The EUR/USD pair has experienced a significant surge.

On Thursday, the primary currency pair is maintaining higher ground. The current exchange rate for EUR/USD is at 1.0905.

Investors are responding against the US dollar following valuable insights gained from the Federal Reserve's assertive remarks.

The Fed's meeting concluded with a neutral outcome. The interest rate was retained at 5.50% per annum, and the overall tone of statements was positive. However, it's essential to recognize that the Fed made some abrupt turns: initially indicating a commitment to a tight monetary policy and later providing a high inflation assessment.

According to the Fed's projections, the US economy is decelerating, but the risks of a recession next year are assessed at less than 50%. A potential interest rate cut in 2024 is seen as a preventive measure against recession risks in the US. Simultaneously, the inflation concern will fade into the background. According to the CME FedWatch monitor, the market anticipates an 80% probability of a rate cut in March.

In essence, the situation has turned complex and emotionally charged. However, the market heard what it desired: a forthcoming interest rate reduction, and this played against the USD.

On Thursday, market attention will pivot to the European Central Bank meeting. Although there's no suspense regarding the interest rate, it's prudent to pay attention to the regulator's comments.

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