Euro hit by geopolitics ahead of FOMC decision

The EUR/USD pair dropped further during the American session and bottomed at 0.9865, the lowest level in two weeks, and became just one pip above the YTD low. The pair is trading at 0.9937 at the time of writing.

The pair remains near the lows as traders await the FOMC decision. Russian President Vladimir Putin announced earlier on Wednesday a partial mobilization to support the Ukraine war. Despite the cautious tone among investors, yields in Europe and in the US kept rising.

The US 10-year yield stands at 3.56% while the 2-year yield rose above 4.00% for the first time since 2007. In Germany, the 5 and 30-year curve inverted for the first time since 2008.

Economic data released on Wednesday showed a decline in US Existing Home Sales in August for the seventh month in a row. The 0.4% slide pushed the annual rate to 4.7 million, better-than-expectations of a 4.8 million reading.

Despite Putin and US data, attention is set on the FOMC that in a few minutes, at 18:00 GMT will announce its decision on monetary policy. The Fed will also release new macroeconomic projections from the FOMC staff and Chairman Powell will held a press conference.