The euro remained steady at $1.167 as market participants closely monitored developments related to the Russia-Ukraine conflict and awaited signals from central bankers regarding future monetary policy. Geopolitical events and expectations surrounding upcoming central bank meetings, especially the Fed’s potential interest rate cut, are influencing market sentiment.
- The euro held at $1.167.
- Markets awaited the central bankers’ symposium this week.
- Washington talks on ending Russia’s war in Ukraine were digested.
- ECB rate expectations remain stable, with markets pricing no change for September.
- Traders see an 85% chance of a 25 bps Fed cut at the September 16–17 meeting.
- Investors are closely watching Fed Chair Jerome Powell’s Jackson Hole speech for guidance on future US monetary policy.
The euro’s stability appears to hinge on several key factors. While geopolitical developments surrounding the Russia-Ukraine conflict and diplomatic efforts could introduce volatility, the market’s primary focus seems to be on the potential divergence between ECB and Federal Reserve monetary policies. The anticipation of a possible interest rate cut by the Fed contrasts with expectations of no change from the ECB in the near term, which may be contributing to the euro’s current level against the dollar.