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The US Federal Reserve will release the latest monetary policy meeting minutes of the Federal Open Market Committee (FOMC) at 18:00 GMT, sought by traders as they would provide insight into the US central bank’s forward path.
On May 2-3, the Fed decided to raise rates by 25 bps, the tenth increase to the Federal Fund Rates (FFR) since the Fed began its tightening cycle on March 2022. Since then, Fed officials have had split views about a pause or another increase, as there lies uncertainty about how much tightening is needed.
Given that the EUR/USD is trading with a bearish tone in the week, the minute’s resumption of a hawkish posture could keep the EUR/USD skewed to the downside.
However, the divergence between central banks, with the European Central Bank expected to raise rates twice for the foreseeable future while the Fed appears to have peaked, might keep the EUR/USD afloat before testing lower price levels. On the other hand, if minutes lean dovish, the EUR/USD pair could reclaim the 1.0800 mark.
