The EUR/USD currency pair remained confined in a narrow trading range on Wednesday ahead of the outcome of the Federal Reserve’s two-day policy meeting.

The Fed is widely expected to cut its federal funds rate target range by 25 basis points to 4.25%-4.50% later today.

Still, investor focus will be on the extent of rate cuts forecast for 2025.

A slower pace of rate cuts would underpin the US Dollar and mount pressure on the Euro, while faster rate cuts would provide certain support to the common currency.

The minutes from the Fed’s November 6th-7th meeting showed policy makers were optimistic that inflation was subsiding and the labor market remained resilient. That supported the case of more interest rate cuts, but at a measured pace.

On the data front, the annual CPI inflation rate in the Euro Area was revised down to 2.2% in November from 2.3% in the preliminary estimate. It was an acceleration from 2% in October.

The EUR/USD currency pair was last inching up 0.02% on the day to trade at 1.0492.