No significant events are expected today.

The EUR/USD pair started the week on the rise, trading around the 1.1170 mark during the Asian session on Monday. This growth is attributed to the weakening of the US dollar (USD), which may be due to rising expectations that the Federal Reserve (Fed) will continue easing policy in November.

On Friday, the US core Personal Consumption Expenditures (PCE) index for August increased by 0.1% month-on-month, falling short of the market’s expectations of 0.2% and below the previous increase of 0.2%. This result aligns with the Federal Reserve’s forecast, suggesting that inflation in the US economy is weakening, increasing the likelihood of an aggressive rate-cutting cycle by the central bank. Meanwhile, the core PCE figure on a yearly basis rose by 2.7%, matching expectations and slightly exceeding the previous reading of 2.6%.

The CME FedWatch tool shows a 42.9% chance of a 25-basis-point rate cut by the Fed in November, while the probability of a 50-basis-point cut has risen to 57.1%, compared to 50.4% a week ago.

St. Louis Fed President Alberto Musalem stated on Friday, according to the Financial Times, that the Fed should begin reducing interest rates “gradually” following a more significant-than-usual half-point rate cut at the September meeting. Musalem acknowledged the possibility that the economy may weaken more than expected, saying, “If that were the case, a faster pace of rate cuts might be appropriate.”

Lower-than-expected inflation in France and Spain has fueled speculation that the European Central Bank (ECB) might conduct another rate cut in October. If this happens, it will be the third rate cut in the ECB’s easing cycle that began in June. The ECB resumed cutting rates in September after holding them steady in July.

Recommendations: Predominantly buy orders from the current price level.