Euro Strengthens as Fed Hike Bets Fade

The EUR/USD pair has gained modestly in the early Asian session on Wednesday, trading near 1.1580 as the US Dollar softens against the Euro.

This shift comes as reduced expectations of a Federal Reserve rate hike have undermined the strength of the US Dollar.

Philip Lane, chief economist at the European Central Bank, stated that Eurozone inflation at 3% remains too high and that markets are pricing in a continuation of the ECB hiking cycle with a 90-94% chance of a 25 basis points hike to 2.50% at the next policy meeting scheduled for September 9.

The technical analysis indicates that EUR/USD holds a constructive near-term bias above the 100-day simple moving average and Bollinger middle band, suggesting underlying demand on dips.