Recent improvement in U.S. economic statistics triggered a wave of euro/dollar selling from the late April peak around $1.36/1.37 to the June 13 low around $1.32. Currency traders basically “priced out” expectations for one or even two Fed rate cuts between now and year-end.
Based on recent data and forecasts for improvement, most economists now expect the Federal Open Market Committee (FOMC) to hold steady at upcoming meetings, with steady policy forecasts through year-end. The federal funds rate currently stands at 5.25 percent, and it’s expected to stay the same at the next meeting on Aug. 7.
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