EUR/USD Braces for Fed Shock as Hike Odds Hit 87%
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Odds of a Federal Reserve rate hike have surged to 87% heading into Wednesday's decision, a scenario markets rarely price for a central bank widely assumed to be easing. For EUR/USD, this repricing matters more than any single data point this quarter, since it directly widens the policy gap between the ECB and the Fed in the dollar's favor.
A confirmed hike would likely trigger a fresh bid for the greenback across G10 pairs, pressuring the euro even without fresh eurozone catalysts. Traders should treat Wednesday's statement and dot plot as the dominant volatility event for EUR/USD this week, overshadowing technical setups until the rate path clarifies.