Euro holds firm above $1.165 before the Fed decision

The euro steadied above $1.165, supported by broad dollar weakness ahead of the Federal Reserve’s policy announcement, firmer rhetoric from ECB officials, and progress on France’s 2026 social-security budget.

The Fed is widely expected to deliver a 25 bp rate cut today, though uncertainty over the policy path for 2026 remains high, placing added focus on the updated FOMC economic projections.

At the same time, investors scaled back expectations for additional ECB easing after Governing Council member Simkus told Bloomberg the central bank does not need to cut rates further with inflation “more or less” at target, comments that echoed similar remarks from Schnabel earlier in the week.

In France, political risk eased slightly after the National Assembly narrowly approved next year’s social-security bill by a margin of 13 votes, offering a temporary boost to Sébastien Lecornu’s minority government as attention now shifts to the still-uncertain passage of the broader state budget.