EUR/USD holds steady above 1.1800 ahead of ECB’s Lagarde speech

• EUR/USD flat lines near 1.1815 in Thursday’s Asian session.

• The Fed cut its key interest rate by 0.25% at its September meeting on Wednesday. 

• ECB President Christine Lagarde is scheduled to speak later on Thursday. 

The EUR/USD pair holds steady around 1.1815 during the Asian trading hours on Thursday. The US Dollar (USD) trades flat against the Euro (EUR) following its plunge to a three-and-a-half-year low as traders assess the Federal Reserve’s (Fed) rhetoric on further interest rate cuts. Traders await the speech from the European Central Bank (ECB) Christine Lagarde later on Thursday. 

The Fed reduced rates by 25 basis points (bps) at its September meeting on Wednesday, as widely expected, and signaled it will steadily lower borrowing costs for the rest of this year. Fed Chair Jerome Powell outlined the recent policy decision as a risk-management reduction in reaction to the weak labor market but stressed that the US central bank does not need to rush easing.

Powell said that the rate-path views are not commitments, adding that higher inflation is still a risk and the Fed is now in a "meeting-by-meeting situation" when it comes to further rate cuts. Less dovish than expected remarks from Powell could provide some support to the Greenback in the near term. 

Across the pond, the latest inflation figures had supported the ECB’s decision to hold rates unchanged at the latest meeting. Rising expectations that the ECB is done cutting rates could underpin the shared currency against the USD. ECB Governing Council members Martins Kazaks and Gediminas Simkus said on Tuesday that interest rates don’t need to be cut further right now, though neither of them ruled out an eventual move. ECB Vice President Luis de Guindos said on Wednesday that the current interest rate is appropriate based on inflation developments and the transmission of monetary policy.