Euro Holds Near $1.20 as Dollar Slides Ahead of Fed Decision

2026-01-28 07:57 By Joana Ferreira 1 min. read

The euro hovered just below the $1.20 level, its strongest since June 2021, buoyed by broad-based US dollar weakness ahead of the Federal Reserve’s closely watched policy announcement later today.

Investors will be looking for guidance on the timing of the next interest rate cut.

The dollar slipped to a near four-year low late Tuesday after President Trump said he was not concerned about the currency’s recent decline.

The greenback was already under pressure amid government shutdown worries, a weak consumer confidence reading, and ongoing policy uncertainty in Washington, including Trump’s renewed tariff threats and criticism of the Fed’s independence.

In Europe, ECB policymaker Martin Kocher warned that further euro strength could prompt the central bank to resume interest rate cuts.

Markets modestly increased expectations for a summer move, with the implied probability of a July cut rising to around 25% from roughly 15% earlier.



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