The greenback is under pressure against the European counterparts on Tuesday, with EURUSD is back on the way to 1.18, though the impetus looks rather limited for the time being. Traders have already digested slightly more “hawkish” Draghi’s statement, and now the markets are preparing for the FOMC meeting that concludes tomorrow.
The probability that the US central bank will increase rates tomorrow is nearly 94%, so this step has been priced in already. So it is possible that we’ll see the traditional "buy the rumour, sell the fact" trade against the dollar should the Federal Reserve fail to hint at a rate hike in December. Another risk factor for the greenback from the meeting is the Fed’s potentially cautious tone when speaking about the trade war consequences for the economy and the monetary policy as well.
As such, should we see a negative scenario and a play against the dollar, EURUSD could challenge the 1.18 threshold once again and refresh the nod-June highs, depending on the FOMD rhetoric. The chances of another rate rise in December, according to the market positioning, are currently marginally above 76%.