The major currency pair is under pressure on Wednesday. The current EURUSD exchange rate stands at 1.0860.
The local news lull played against market stabilisation. In the absence of new drivers, investors are preoccupied with speculating on the Federal Reserve's future moves regarding interest rates. While everyone is waiting for the Fed Reserve's chair Jerome Powell's speech at the Jackson Hole symposium and entertaining themselves with speculation, the dollar is strengthening.
Recent macroeconomic data from the US has helped to dispel some of the fears of a US recession, but not completely. Inflation remains above the target level. Investors expect the Fed to maintain interest rates high for a longer period than previously anticipated.
The market is betting on signals indicating the Fed's readiness to further increase the interest rates further. This is seen as the support level for the US dollar.
Currently, the market expects an 86% chance of the interest rate remaining at 5.5% per annum in the September meeting. However, the possibility that the rate will be raised again this year is still increasing.