Ella 
EUR/USD held steady ahead of the release of minutes from the May 1 meeting of the U.S. Federal Open Market Committee (FOMC), scheduled for release on Wednesday. During the Asian trading session, the pair was hovering around 1.0850.
The Federal Reserve (Fed) remains cautious on inflation and the possibility of a rate cut in 2024. Speaking at the “Central Banking in a Post-Epidemic Financial System” event on Wednesday, Boston Federal Reserve President Susan Collins emphasized that progress on interest rate adjustments will take longer and emphasized patience as the key to correct Fed policy. importance.
Financial markets expect the Federal Reserve to cut interest rates for the first time as early as September and to cut interest rates twice before the end of the year, each by 25 basis points. The odds of the Fed delivering a quarter-point rate cut in September rose slightly to 50.3%, compared with 49.6% a day earlier, according to the CME FedWatch tool.
In terms of the euro, Eurostat announced a trade surplus of 24.1 billion euros in March, up from 22.8 billion euros last month and exceeding market forecasts of 19.9 billion euros. This marks the largest trade surplus since December 2020.
The euro was supported by heightened uncertainty over the European Central Bank (ECB) extending its rate-cutting cycle beyond June. While ECB policymakers are comfortable with the idea of the central bank cutting three key interest rates starting at its June meeting, they are hesitant about the trajectory of further cuts. Instead, they tend to maintain a data-dependent approach.
