EUR/USD strengthens near 1.1150 ahead of Fed’s Powell speech

• EUR/USD gains ground around 1.1140 in Thursday’s Asian session. 
• Dovish remarks from Fed officials this week might continue to undermine the USD. 
• HSBC analysts expect the ECB to cut rates by 25 bps at every meeting from October through to April next year. 

The EUR/USD pair trades firmer near 1.1140 during the Asian trading hours on Thursday, bolstered by the weaker Greenback broadly. Several US Federal Reserve (Fed) officials are set to speak on Thursday, including Fed Chair Jerome Powell. Furthermore, the US weekly Initial Jobless Claims, Durable Goods Orders and final US Gross Domestic Product (GDP) Annualized for the second quarter (Q2) will be released. 

Traders await fresh catalysts about how aggressive future US rate reductions would be. Many analysts see the Fed raising jumbo rate cuts again in the November meeting. “Given his comments in Jackson Hole and what we heard from him at the press conference, yes, I think Chair Powell would lean toward cutting 50 basis points again if there were further labor market weakness,” said Mr. Matthew Luzzetti, chief US economist at Deutsche Bank.

Earlier this week, Chicago Fed President Austan Goolsbee said policymakers "can't be behind the curve" if the economy is to have a soft landing. Meanwhile, Atlanta Fed President Raphael Bostic noted the US central bank needn't go on a "mad dash" to lower rates. Fed Governor Adriana Kugler said on Wednesday that she “strongly supported” the central bank’s decision last week, adding that it would be appropriate to cut rates further if inflation continues to ease as expected. Traders will take more cues from Fedspeak on Thursday. Any dovish remarks from Fed officials this week could trigger bets for another oversized interest rate cut by the Fed, which drags the Greenback lower against the Euro (EUR).

Survey data released earlier this week showed Eurozone business activity as a whole contracted sharply, triggering speculation that the European Central Bank (ECB) would cut rates again. HSBC analysts said on Wednesday it now expects the ECB to cut interest rates by 25 basis points (bps) at every meeting from October through to April next year, given weakening economic data.