In line with the broad-based consolidation theme in the FX universe, EUR/USD trades within a narrow range in the vicinity of the 1.0800 region ahead of the key FOMC event due later on Wednesday.

EUR/USD remains focused on the Fed gathering

EUR/USD has so far interrupted its weekly recovery and hovered around the 1.0800 zone on Wednesday in response to the generalized directionless mood in the global markets as investors await the interest rate decision by the Federal Reserve, which is expected later in the European evening.

While a pause in the Fed’s hiking cycle is largely telegraphed, another 25 bps rate raise by the ECB is also anticipated on Thursday. The Fed’s decision to reach an impasse in its tightening programme was further propped up by another decline in US inflation figures last month.

However, fast forwarding to July, both central banks are expected to hike interest rates by a quarter-point. In fact, according to the FedWatch Tool by CME Group, the probability of that scenario approaches 62% so far