Euro awaits ECB rate decision, dollar under pressure

The EURUSD pair holds on to Monday’s gains slightly above 1.1500 during the European trading session on Tuesday. The major currency pair trades firmly as the US dollar has come under pressure ahead of the Federal Reserve’s monetary policy announcement on Wednesday.

The DXY Dollar Index, which tracks the greenback’s value against six major currencies, trades marginally lower to near 99.70.

Investors expect the Fed to leave interest rates unchanged in the current range of 3.50-3.75% as the Middle East conflict-driven spike in the price of oil has prompted inflation expectations in the entire world.

In the policy meeting, investors will pay close attention to cues regarding how long the Fed could hold interest rates steady at current levels.

Meanwhile, the Euro demonstrates a mixed performance in the countdown to the European Central Bank’s interest rate decision on Thursday.

The ECB is anticipated to leave interest rates steady. Latest comments from a slew of ECB officials showed that they are not encouraged to any monetary policy adjustment, as inflationary pressures have remained broadly close to the 2% target.

(Source: OANDA)