EUR/USD dropped to about 1.1362 in early European trade on Tuesday as the dollar strengthened ahead of the Federal Reserve decision on Wednesday. Markets price the Fed holding the policy rate at 3.50%-3.75%. Investors will focus on the Fed statement and the chair's press conference for signals on inflation and the economic outlook; the Fed is unlikely to offer new guidance on the policy path. The CME FedWatch Tool shows an 80.8% probability of a rate hike at the September meeting. In the euro ar

EUR/USD dropped to about 1.1362 in early European trade on Tuesday as the dollar strengthened ahead of the Federal Reserve decision on Wednesday. Markets price the Fed holding the policy rate at 3.50%-3.75%. Investors will focus on the Fed statement and the chair's press conference for signals on inflation and the economic outlook; the Fed is unlikely to offer new guidance on the policy path. The CME FedWatch Tool shows an 80.8% probability of a rate hike at the September meeting. In the euro area, markets await preliminary July HICP for Germany on Thursday and for the euro area on Friday; those prints will be monitored for their impact on ECB rate expectations.