10.12.202508:50:43UTC+00Euro Holds Firm Above $1.165 as Markets Await Fed Decision

The euro remained stable above the $1.165 mark, bolstered by a generally weaker dollar in anticipation of the Federal Reserve's upcoming policy announcement. Additionally, stronger rhetoric from European Central Bank (ECB) officials and advancements in France's 2026 social-security budget contributed to its steadiness. The Federal Reserve is anticipated to implement a 25 basis point rate cut today; however, uncertainty persists regarding the policy direction for 2026, which shifts additional attention to the forthcoming updates in the Federal Open Market Committee's (FOMC) economic projections. Concurrently, investors have reduced expectations for further easing by the ECB after Governing Council member Simkus indicated to Bloomberg that there is no necessity for additional rate cuts, as inflation aligns “more or less” with the target. His remarks echoed those of Schnabel from earlier in the week. In France, political risk slightly diminished after the National Assembly narrowly approved the next year's social-security bill by a margin of 13 votes, providing temporary relief to Sébastien Lecornu's minority government. The focus now turns to the yet uncertain approval of the broader state budget.