SwanBitcoin445X250

EUR/USD Rate Talking Points

EURUSD[1] snaps the range bound price action from earlier this week even though US President Donald Trump tweets that the Federal Reserve is “too slow to cut,” and the exchange rate may continue to consolidate over the coming days as the Federal Open Market Committee (FOMC) tames speculation for a rate easing cycle.

EURUSD Rebound Unravels as Fed Tames Bets for Rate Easing Cycle

Fresh data prints coming out of the euro-area generated a limited reaction in EURUSD, but the updates to the Gross Domestic Product (GDP) report should keep the European Central Bank (ECB) on the sidelines as the growth rate climbs 0.2% q/q in the second quarter of 2019.

In contrast, the Federal Reserve may come under increased pressure to implement lower interest rates as President Trump insists that “the Fed is holding us back,” and it remains to be seen if the FOMC[2] will reverse the four rate hikes from 2018 as the commander in chief goes on to say that “our economy is strong.”

However, fresh remarks from St. Louis Fed President James Bullard, a 2019 voting member on the FOMC, suggests the central bank is in no rush to implement a rate easing cycle as “macroeconomic outcomes are quite good for the United States.”

Image of Fed Fund futures

Keep in mind, Fed Fund futures still reflect a 100% probability for at least a 25bp reduction on September 18, but Fed officials may continue to tame bets for a rate easing cycle as “the economy’s not in recession.”

In turn, the FOMC may attempt to buy more time as the Trump administration delays a portion of the next tranche of China tariffs to December 15, and

Read more from our friends at Daily FX