• EUR/USD floundered on Wednesday as markets remain tepid.
• Investors taking a breather after a rough rebalancing late last week.
• Despite breaking higher in recent days, Fiber bids run out of steam.

EUR/USD paddled in a tight circle on Wednesday, churning just above the 1.0900 handle as Fiber traders take a breather from recent volatility sparked by a misprint in key US data last week. EUR/USD flubbed a bullish dash for 1.1000, leaving bids hung out to dry.

The rest of the trading week sees limited meaningful economic calendar releases, leaving Federal Reserve (Fed) rate cut bets as the key market driver. Traders get a breather of high-impact data until next week, which sees US Producer Price Index (PPI) inflation next Tuesday, followed by European Gross Domestic Product (GDP) growth on Wednesday alongside US Consumer Price Index (CPI) inflation.

Rate markets have priced in roughly two-to-one odds of a 50-basis-point rate trim from the Fed on September 18, with a further two cuts expected through the rest of 2024. According to the CME’s FedWatch Tool, rate probabilities see an 83% chance of the Fed’s benchmark fed funds rate hitting 425-450 basis points by the end of December.