EUR/USD falls below 1.0900 and the Fed Minutes show the division of opinion among its officials

• Fed officials are adamant about their commitment to reaching the 2% inflation target, and many see further tightening as necessary.
• A split is emerging among policymakers as some advocate keeping rates unchanged, highlighting the economy’s resilience and potential risks.
• EUR/USD reacts with a decline, hovering around 1.0880, marking its lowest point since mid-August.

EUR/USD fell below 1.0900 for the second day in a row, as the latest Federal Reserve (Fed) monetary policy minutes began to show that policymakers are split between excessive tightening while others prioritize fighting against inflation. The EUR/USD pair is trading volatilely, between the daily low of 1.0870 and 1.0900.

Fed Minutes Reveal Board Divided on Rate Decisions, With Inflation Worries at the Forefront

The minutes showed that all Fed officials remain “resolute in their commitment to reduce inflation to the target of … 2%,” with most participants estimating that upside risks to inflation would require further tightening.

However, the Fed board began to be divided on monetary policy, with a “pair” of participants wanting to keep rates unchanged, and one member, the Fed chairman of Atlanta manager Raphael Bostic was in favor of keeping rates unchanged.

The minutes showed that although the economy continues to hold up, downside risks to economic activity and upside risks to the unemployment rate persist.

Federal Reserve officials agreed that future rate decisions will depend on the “totality” of incoming data, while taking a more cautious approach in the coming months.

EUR/USD reaction

EUR/USD fell below 1.0900, extending its losses below the 1.0880 zone, a level last seen on August 14, slightly below the S1 pivot, which acted as support, as EUR/USD is around the 1.0880 area.

EUR/USD technical levels