EUR/USD Rallies as Traders Trim Fed Rate-Hike Bets Amid Soft US Inflation
The EUR/USD pair has found support and is holding modest gains on Wednesday, as traders assess the latest economic data from both sides of the Atlantic. The pair trades around 1.1363, up 0.20% on the day, after touching 1.1312 on Tuesday, its lowest level since May 2025.
Softer-than-expected US inflation data has weighed on the US Dollar (USD) as traders trim bets on another Federal Reserve (Fed) interest-rate hike in October. The US core Personal Consumption Expenditures (PCE) Price Index rose 0.2% MoM in August, below the 0.3% forecast.
Markets now see around a 37% chance that the US central bank will raise interest rates next month, down from approximately 70% earlier this week, according to the CME FedWatch Tool. However, other data pointed to resilience in the US economy, limiting the Greenback’s decline.