NextFin news, On Monday, September 15, 2025, the EUR/USD currency pair held firm near 1.174 in global foreign exchange markets, reflecting cautious investor sentiment ahead of the Federal Reserve's scheduled policy announcement on Wednesday. The trading activity took place in major financial centers including New York and London.
The euro's resilience came despite Fitch Ratings downgrading France's sovereign credit rating from AA- to A+, marking the lowest rating from a major agency on record for France. This downgrade, announced earlier in the week, raised concerns about France's fiscal outlook amid political turbulence, including the resignation of François Bayrou and the appointment of Sébastien Lecornu as Prime Minister.
Following the downgrade, French 10-year government bond yields rose to 3.5%, and 30-year yields approached 4.33%, though these levels remained below peaks seen in early September that had previously pressured the euro. Market participants viewed these developments as contained, with the euro's near-term direction more influenced by expectations surrounding the U.S. Federal Reserve's monetary policy.
Market consensus ahead of the Fed meeting strongly priced in a 25 basis point interest rate cut, with over 90% probability, driven by softer U.S. labor market data such as initial jobless claims rising to 263,000, the highest since June 2023. Inflation data showed mixed signals, with August consumer prices increasing 0.4% month-over-month and 2.9% year-over-year, slightly above forecasts. Political pressure from former President Donald Trump for deeper rate cuts added to market speculation of a dovish Fed stance.
Meanwhile, the European Central Bank (ECB) maintained its deposit rate at 2.00% last week, with ECB President Christine Lagarde expressing optimism about balanced growth risks and progress on disinflation. This policy divergence between the ECB's steady stance and the Fed's anticipated easing provided relative support to the euro against the U.S. dollar.
Technically, EUR/USD was trading within a bullish channel, supported by key moving averages near 1.1700, with resistance levels identified around 1.1780 to 1.1830. Market participants remained cautious, awaiting the Fed's announcement on Wednesday, which is expected to be the primary driver of near-term currency movements.
Sources: Seeking Alpha (September 15, 2025), FXStreet (September 15, 2025), TradingNews.com (September 15, 2025).
Explore more exclusive insights at nextfin.ai.
