EUR/USD steadies in bullish territory ahead of the Fed

The EUR/USD pair sits back into neutral territory as markets get prepared for the Fed’s policy decision. Traders are on look out for a pivot in the chair’s tone.

The EUR/USD is sitting tight in mas investors await the outcome of the Fed this week while investors worry over a potential slowdown in the pace of interest-rate hikes from December.

Analysts look for the FOMC to deliver another 75bp rate hike and say the decision will bring policy to a level at which the Committee might feel more comfortable in shifting to a steadier hiking pace. The exact timing, however, will highly depend on the CPI data before the December meeting. Powell might offer some hints in the post-meeting press conference.

Looking forward, for December, the fed funds futures market has priced in a 57% probability of a 50-bps increase amid suggestions from Fed officials of potentially slowing down the tightening pace. That was down, however, from roughly a 70% chance last Friday.