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Euro Reaches Session High as Fed Adjusts Rate-Setting Meetings
Confirmed
In Short: FXStreet reported that the Fed will maintain eight meetings a year but noted that one meeting starting next autumn will not vote on rates, leading to six policy-setting meetings in 2028.
The euro climbed to a session high against the US dollar, rising from the lower half of Wednesday's range to above 1.1150, according to FXStreet.
Eurostat's first reading of euro area third-quarter Gross Domestic Product (GDP) is due on Friday at 10:00 GMT, adding to market anticipation.
FXStreet reported that the Fed will maintain eight meetings a year but noted that one meeting starting next autumn will not vote on rates, leading to six policy-setting meetings in 2028.
The US Dollar advanced to a nearly two-week high, supported by expectations that the Bank of Japan (BoJ) may hold off on aggressive rate hikes, putting pressure on the Japanese Yen.
The European Central Bank (ECB) sets rates at eight meetings a year, so the Fed's side of the EUR/USD rate gap will have fewer dates to change on.
Thursday's US releases, including third-quarter GDP and the Personal Consumption Expenditures Price Index (PCE) for September, are the first data in the period Fed Chair Kevin Warsh called information-rich.
Traders still had a December hike near 90% priced in after the statement, and EUR/USD's climb came during those answers.
Interactivecrypto noted that while the ECB is poised for a modest rate hike, the dollar’s safe-haven appeal amid geopolitical tensions and terms-of-trade challenges for Europe are weighing on the euro.
Beyond interest rate expectations, the euro is facing structural headwinds related to Europe’s reliance on energy imports.
Eurostat’s flash estimate revealed that Eurozone annual inflation accelerated to 3.3% in August 2026, up from 2.9% in July, reaching its highest level since September 2023.
The EUR/USD currency pair declined modestly to 1.1578 on September 2, 2026, reflecting a complex interplay of hawkish Federal Reserve signals, rising inflation in the Eurozone, and broader dollar strength.
Analysts at MUFG expect two additional 25 basis point rate hikes at the next meetings in October and December, taking the deposit rate to 3.00% by year-end.
What this adds
The market's reaction to the Fed's announcement and the upcoming ECB meeting highlights the complex interplay of global economic factors affecting currency values.
What's confirmed
- The euro climbed to a session high against the US dollar, rising from the lower half of Wednesday's range to above 1.1150, according to FXStreet.
- Eurostat's first reading of euro area third-quarter Gross Domestic Product (GDP) is due on Friday at 10:00 GMT, adding to market anticipation.
- FXStreet reported that the Fed will maintain eight meetings a year but noted that one meeting starting next autumn will not vote on rates, leading to six policy-setting meetings in 2028.
- The US Dollar advanced to a nearly two-week high, supported by expectations that the Bank of Japan (BoJ) may hold off on aggressive rate hikes, putting pressure on the Japanese Yen.
- The European Central Bank (ECB) sets rates at eight meetings a year, so the Fed's side of the EUR/USD rate gap will have fewer dates to change on.
- Thursday's US releases, including third-quarter GDP and the Personal Consumption Expenditures Price Index (PCE) for September, are the first data in the period Fed Chair Kevin Warsh called information-rich.
- Traders still had a December hike near 90% priced in after the statement, and EUR/USD's climb came during those answers.
- Interactivecrypto noted that while the ECB is poised for a modest rate hike, the dollar’s safe-haven appeal amid geopolitical tensions and terms-of-trade challenges for Europe are weighing on the euro.
- Beyond interest rate expectations, the euro is facing structural headwinds related to Europe’s reliance on energy imports.
- Eurostat’s flash estimate revealed that Eurozone annual inflation accelerated to 3.3% in August 2026, up from 2.9% in July, reaching its highest level since September 2023.
- The EUR/USD currency pair declined modestly to 1.1578 on September 2, 2026, reflecting a complex interplay of hawkish Federal Reserve signals, rising inflation in the Eurozone, and broader dollar strength.
- Analysts at MUFG expect two additional 25 basis point rate hikes at the next meetings in October and December, taking the deposit rate to 3.00% by year-end.
What's still developing
- The European Central Bank (ECB) announces at 13:15 GMT on Thursday, and ECB President Lagarde takes questions at 13:45 GMT.
- Market focus now shifts to the upcoming Fed and ECB meetings for clues on the next monetary policy moves.
- The pair closed Thursday almost unchanged because UK two-year yields rose 17.4 basis points, keeping pace with a 17 basis point rise in eurozone two-year yields, according to KBC.
- "We think the Iran war has lasted sufficiently long, keeping energy prices elevated for long enough, to make a December rate hike more likely than not," says Nomura.