The euro rose in European markets on Wednesday against a basket of global currencies, marking its first gain in five sessions versus the US dollar. The rebound came as investors bought the euro from lower levels, while the dollar’s upward momentum paused in the forex market.

Expectations of a European rate cut in September declined following last week’s hawkish European Central Bank meeting. Investors now await key upcoming economic data from the eurozone — especially July inflation figures — to reprice those expectations.

Price Overview

• EUR/USD today: The euro climbed 0.25% to $1.1573, from an opening price of $1.1546. The session low stood at $1.1545.

• On Tuesday, the euro ended down 0.35% versus the dollar — its fourth straight daily loss — after hitting a five-week low of $1.1516 following a German-French backlash against the recent EU-US trade deal.

US Dollar

The US Dollar Index fell 0.2% on Wednesday, retreating from a five-week high of 99.14 points, reflecting a pause in the greenback’s advance against major currencies.

Beyond profit-taking, dollar levels declined as investors refrained from building new long positions ahead of the US Federal Reserve’s policy statement. Markets are looking for strong clues regarding the likelihood of a September rate cut.

The Fed concludes its crucial policy meeting later today. Markets widely expect rates to remain unchanged for the fifth consecutive meeting as officials assess appropriate policy for the world’s largest economy.

ECB Policy Outlook

• Last week, the ECB held its key interest rates steady at 2.15% — the lowest since October 2022 — after having cut rates at the previous meeting for the seventh straight time.

• The ECB opted to pause its easing cycle amid uncertainty surrounding future US trade relations.

• ECB President Christine Lagarde said after the meeting, “We are in wait-and-see mode,” and added that the eurozone economy has shown resilience despite global uncertainty.

• According to Reuters sources, a clear majority at the ECB meeting preferred to keep rates unchanged again in September.

• Money markets now price in less than a 30% chance of a 25 basis-point ECB rate cut in September, down from 50% previously.

• To reassess these probabilities, investors are watching closely for upcoming eurozone data and ECB official commentary.

Euro Outlook

• At Economies.com Today, we expect that if the Federal Reserve’s comments turn out to be less hawkish than expected, the probability of a US rate cut in September will increase — likely fueling further euro recovery against the dollar.

The Japanese yen rose in Asian markets on Wednesday against a basket of major and minor currencies, continuing its recovery for the second consecutive day from a two-week low versus the US dollar. This was driven by buying activity at lower levels and a pause in the dollar's recent rally in the foreign exchange market.

The Bank of Japan’s policy meeting begins today, with decisions expected on Thursday. The bank is widely expected to keep interest rates unchanged for the fourth consecutive meeting at 0.50%, the highest level since 2008 when the global financial crisis began.

Price Overview

• USD/JPY today: The dollar declined by 0.45% against the yen to ¥147.85, down from the opening price of ¥148.45. The pair recorded a session high at ¥148.53.

• On Tuesday, the yen gained less than 0.1% against the dollar at settlement — its first gain in four days — after earlier hitting a two-week low at ¥148.81.

US Dollar

The US Dollar Index fell 0.2% on Wednesday, pulling back from a five-week high of 99.14 points, reflecting a pause in the greenback’s climb against a basket of global currencies.

In addition to profit-taking, the dollar declined as investors refrained from building new long positions ahead of the US Federal Reserve’s policy decision, which may offer strong signals reinforcing the likelihood of a rate cut in September.

The Fed concludes its critical monetary policy meeting later today, with broad expectations of holding interest rates steady for the fifth straight meeting — amid ongoing assessments of appropriate policy for the world’s largest economy.

Bank of Japan

The Bank of Japan’s policy meeting begins today, with decisions due Thursday. Rates are expected to remain unchanged at 0.50% for the fourth consecutive meeting — still the highest level since the 2008 financial crisis.

BOJ policymakers are also expected to discuss the potential impact of Japan’s recent trade agreement with the US on the country’s export-driven economy. This may become a key factor in determining the timing of the next rate hike.

With monetary policy expected to stay steady, markets will focus on BOJ Governor Kazuo Ueda’s post-meeting comments for any hints on whether global economic pessimism might influence the pace of Japan’s future rate hikes.

Yen Outlook

• At Economies.com Today, we expect the yen to remain in positive territory against the US dollar — particularly if the Federal Reserve responds to Trump’s criticism and adopts a more dovish approach.

Soybean and corn futures fell on the Chicago Board of Trade on Tuesday, pressured by abundant global supplies, weak demand, and continued favorable weather for crops in the US Midwest.

Corn prices came under additional pressure due to expectations of a bumper US harvest, supported by forecasts of favorable weather in the Corn Belt. Meanwhile, wheat prices declined as harvests accelerated across the Northern Hemisphere, boosting expectations of higher global supply.

Oli Hough of IKON Commodities in Sydney stated: “Soybeans remain under pressure due to large expected crops in both the US and globally. It’s hard to see this market rallying significantly in the coming months.”

Weak export demand further weighed on soybeans, as the latest weekly US export sales figures disappointed.

On the trade front, the US and the European Union reached a framework agreement on Sunday that included a 15% import tariff on most European goods, avoiding a full-blown trade war that could have jeopardized a trade relationship representing about one-third of global commerce.

A German trader commented: “The US-EU agreement mentioned the potential removal of tariffs on some agricultural products, but the lack of details makes it difficult to judge.” He added, “Still, there’s general relief that a destructive trade war between the US and the EU has been averted.”

The German trader also noted that wheat is burdened by both weak demand and an influx of supply from ongoing harvests in the US, EU, and Black Sea region.

“There are virtually no wheat purchase tenders in the market at the start of the week,” he said.

“Russian farmers were initially reluctant to sell their new crop, but with harvest season expanding in Russia, they may be forced to increase exports, as they can’t store the entire crop.”

Corn

In trading, December corn futures fell by 0.7% to close at $4.11 per bushel.

Soybeans

November soybean futures declined by 0.2% to $10.09 per bushel.

Wheat

September wheat futures dropped by 1.6% to settle at $5.26 per bushel.

Most digital currencies declined on Tuesday amid weak risk appetite, despite optimism surrounding trade agreements between the US and its partners. Ethereum and other cryptocurrencies came under selling pressure as investors moved to lock in profits.

The United States and China recently concluded a round of trade talks, agreeing to extend the existing tariff truce — though no details were provided regarding the duration or specific terms of the extension.

While the US has recently reached trade agreements with the European Union and Japan, negotiations with China remain more complex and protracted, according to Reuters.

US President Donald Trump stated that he may meet with Chinese President Xi Jinping before the end of the year.

The US Federal Reserve is holding its two-day policy meeting starting Tuesday and concluding Wednesday, with expectations that interest rates will remain within the range of 4.25% to 4.5%.

Traders will be focused on the tone of the accompanying statement and commentary, looking for potential signals of future rate cuts later in the year. A dovish tone from the Fed could offer additional support to Bitcoin by lowering yields on low-interest safe-haven assets.

Meanwhile, more companies continue to report their quarterly earnings. Boeing released its results today, but attention in the coming days will shift to Microsoft, Meta, Amazon, and Apple.

US Bureau of Labor Statistics data released Tuesday showed that job openings fell to 7.44 million in June, down from May’s downwardly revised figure of 7.7 million — a decline of 57,000 — and below expectations for a drop to 7.51 million.

Separately, data from the Conference Board revealed that US consumer confidence rose to 97.2 points in July, up from 95.2 in the upwardly revised June reading — an increase of 2.2 points.

In its latest update to the World Economic Outlook report first published in April, the International Monetary Fund raised its forecast for global economic growth in 2025 by 0.2 percentage points to 3.0%, and for 2026 by 0.1 percentage points to 3.1%. However, both forecasts remain below the January estimates of 3.3% for each year and below the pre-pandemic historical average of 3.7%.

Ethereum

As for trading activity, Ethereum declined by 0.8% to $3,748.9 as of 21:14 GMT on CoinMarketCap.