EUR/USD declines and levels off

• The EUR/USD pair fell within the 1.1650-1.1800 range
• The dollar index is stable; investors await US data
• Key US employment reports are due by the week's end
• Expectations for a Fed rate cut persist, but not in January

EUR/USD declined to 1.1695 on Wednesday.

On the daily chart, the euro/dollar pair is holding within the 1.1650-1.1800 boundaries.

The dollar index hovered near 98.5 points after a moderate rise in the previous session. Investors are positioning themselves ahead of a series of US macro data releases that could influence expectations for Fed policy.

In focus today are the publication of the ISM Services PMI and JOLTs job openings data. Weekly jobless claims will be released on Thursday, and the key event of the week will be the US employment report for December on Friday.

Earlier this week, ISM data indicated the sharpest contraction in US manufacturing activity since 2024.

Additionally, the market assessed comments from Fed officials. On Tuesday, Federal Reserve Governor Stephen Miran stated that to maintain economic momentum, the regulator may need a more aggressive reduction in interest rates this year.

However, markets are still pricing in an over 80% probability of the rate remaining unchanged at the upcoming Fed meeting.

In the broader context, the US dollar received support from a weakening euro following the release of softer-than-expected inflation data from Germany and France.