The primary currency pair looks weak. The current exchange rate for EURUSD stands at 1.0829.
The publication of the minutes from the last meeting of the US Federal Reserve System turned out to be the driver that justified the market fluctuations.
The overall sentiment of Fed monetary policymakers at the 30 April-1 May meeting was one of caution and the need for more time for data collection. This aligns with earlier statements from Federal Reserve officials emphasising the importance of a cautious approach and avoiding any sudden moves prematurely. The Fed needs more confidence in inflation's quick and stable return to its 2% target.
The currency market initially anticipated two rate cuts this year – in September and December. However, it has now revised its expectations, foreseeing only one. Moreover, the market is shifting its forecasts from September to November, believing that the Fed's data collection will take longer.
It is worth noting that the November Fed meeting will be held right after the US elections.