Ella 
EUR/USD traded range-bound during the European session on Tuesday, while the U.S. dollar (USD) moved higher amid uncertainty among market participants ahead of the Federal Reserve’s (Fed) monetary policy announcement on Wednesday. The U.S. Dollar Index (DXY), which tracks the dollar’s value against six major currencies, was higher near 104.70.
The Fed is expected to keep interest rates unchanged at a range of 5.25%-5.50% for the eighth consecutive meeting. This is expected to be the last decision to stabilize interest rates, with the Fed moving toward normalizing policy starting at its September meeting.
Pricing data for 30-day federal funds futures suggests the central bank will cut interest rates by 25 basis points from current levels at its September meeting, according to the CME FedWatch tool. The data also showed that there will be two more rate cuts before the end of the year, not just one as Fed policymakers predicted in the latest Fed dot plot.
Market experts believe the Fed’s acknowledgment that inflation is back on track to the bank’s 2% target has made some progress, while there are also upside risks to the strength of the labor market. That would signal that the Fed is ready to ease its policy tightening framework that has lasted more than two years.
This week, investors will also be watching a slew of economic data. At Tuesday’s meeting, investors will focus on June JOLTS job vacancy data due out at 14:00 GMT. It is estimated that the number of job vacancies announced by employers will drop to 8.03 million from the previously announced 8.14 million.
