The US dollar had a tight range of movement against the euro on Tuesday, as currency traders anticipated upcoming monetary policy meetings in major economies.
The Governing Council of the European Central Bank meets in Frankfurt on Thursday to decide its future monetary policy. While the Federal Open market Committee gathers next week in a meeting that is expected to end with a decision to raise interest rates in the United States.
Following a drop against the shared currency on Monday, the dollar remained little changed on Tuesday. Dollarâs sharp decline yesterday came as traders had bigger appetite for the euro, even after Italian voters refused constitutional amends that were suggested by Prime Minister Mateo Renzi. The crushing result of the Italian referendum prompted Renzi to file his resignation from the government.
The shared currency was mainly aided by traders looking for quick profits during its rapid recovery yesterday. The euro remained stable against the US dollar today as anticipation towards the FOMCâs meeting grew.
Futures prices now show a probability of an interest rate hike at 92.7%, according to the CME Group FedWatch tool. This is lower than the near certainty that investors expected over the past week, but remains a very high probability.
EUR/USD traded at 1.0715 as of 20:34 GMT, after touching 1.0782 at 08:20 GMT, the pairâs highest level for the day. EUR/USD opened trading today at 1.0762.
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