EUR/USD Eyes Central Bank Decisions Amid Interest Rate Hesitation

The EUR/USD exchange rate has shown a modest recovery in strength over the past trading session, gaining more than 0.3%.

This uptick may be attributed to market expectations ahead of upcoming central bank decisions that could reshape the outlook for EUR/USD.

Next week will be crucial as the Federal Reserve is set to announce its interest rate decision on April 29, followed by the European Central Bank on April 30.

The market continues to project a pause in rate changes from the Fed, with a probability close to 99.5% that rates will remain at 3.75%, and potentially stay this way until 2027.

In contrast, expectations for the European Central Bank are more divided, with a roughly 91% probability that the deposit rate will remain unchanged at 2.00%, but growing probabilities of potential rate increases toward 2.25%.