Monday, 25 August 2025
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EUR/USD stands tall against a weaker US Dollar after Fed Powell's shock
Monday, 25 August 2025 15:26 WIB | EUR/USD | EuroEUR/USD

The EUR/USD pair has opened the week with a moderate pullback from Friday's highs, at 1.1742. The pair is trading at 1.1700 at the European session opening on Monday, as the US Dollar picks up from the low levels reached after the Federal Reserve (Fed) Chairman Jerome Powell opened the door for monetary easing.

Powell surprised investors with an unexpected dovish tone at the Jackson Hole Symposium, warning that "downside risk to employment is rising" and that if those risks materialize, they could quickly lead to a strong increase in unemployment. More specifically, he affirmed that the shifting balance of risks may warrant adjusting the bank's policy stance, which would be a clear indication of an immediate interest rate cut.

The US Dollar tumbled across the board following Powell's comments, with investors ramping up bets for some monetary easing at September's Fed meeting. The CME Group's FedWatch Tool indicates a nearly 90% chance of a 27-basis-point cut next month, down from about 75% before the Jackson Hole speech, and another quarter-point cut before the end of the year.

In Monday's economic calendar, US New Home sales data, New York Fed President John Williams and Dallas Fed President Lorie Logan speeches will provide some fundamental guidance for the Greenback, although the highlight of the week will be the US Personal Consumption Expenditures (PCE) Price Index, the Fed's inflation gauge of choice, which might pose a challenge for the central bank's policymakers.

Source : Fxstreet

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