# Euro folds as the Fed trades cuts for hikes

> The Fed held its policy rate at 3.50% to 3.75% but its updated projections flipped the 2026 rate path from a cut to a hike bias. The median 2026 PCE inflation forecast rose to 3.6% from 2.7%, and EUR/USD fell about 50 pips on the release.

- Date: 2026-06-17 · published 2026-06-17T12:00:00.000Z
- Category: macro · region US · magnitude medium
- Page: https://feedsoft.ai/events/11521-euro-folds-as-the-fed-trades-cuts-for-hikes
- Commodities: [US Dollar (Broad)](https://feedsoft.ai/c/DXY.md), [Euro (USD per EUR)](https://feedsoft.ai/c/EURUSD.md)

## Why it matters

A shift toward Fed hikes strengthens the dollar, which typically pressures dollar-priced grain and oilseed prices. Higher US rates also raise borrowing costs for feed businesses.

## Read by commodity

- DXY: bullish ▲
- EURUSD: bearish ▼

## Linked price moves

| Commodity | Date | Window | Change % | z-score | Why linked |
| --- | --- | --- | --- | --- | --- |
| EURUSD | 2026-06-18 | 1 | -1.1% | -3.2 | The Fed's projections shifted from a cut bias to a hike bias, triggering the initial EUR/USD drop that carried into the 1-day move. |
| DXY | 2026-06-24 | 5 | +1.8% | 3.1 | The Fed's projection shift from cuts to a hike bias and higher PCE inflation forecast fueled dollar demand via rate differentials. |

## Similar past events

| Commodity | Date | Event | 5-day % | 20-day % |
| --- | --- | --- | --- | --- |
| DXY | 2022-01-17 | [Dollar edges up as traders assess Fed rate hike bets \| Reuters](https://feedsoft.ai/events/43326-dollar-edges-up-as-traders-assess-fed-rate-hike-bets-reuters.md) | +0.7% | +0.7% |
| DXY | 2025-03-20 | [EUR/USD weakens as Fed sees no rush for interest rate cuts](https://feedsoft.ai/events/25794-eur-usd-weakens-as-fed-sees-no-rush-for-interest-rate-cuts.md) | +0.3% | -2.0% |
| DXY | 2019-08-31 | [Euro hits two-year low amid trade concerns \| The National](https://feedsoft.ai/events/57799-euro-hits-two-year-low-amid-trade-concerns-the-national.md) | -0.9% | -0.2% |
| DXY | 2018-12-19 | [Gold falls as Fed raises rates, indicates further hikes for 2019](https://feedsoft.ai/events/61491-gold-falls-as-fed-raises-rates-indicates-further-hikes-for-2019.md) | -0.3% | -1.6% |
| DXY | 2021-09-29 | [Dollar at 2021 highs as traders brace for Fed taper](https://feedsoft.ai/events/45259-dollar-at-2021-highs-as-traders-brace-for-fed-taper.md) | +0.1% | -0.5% |
| EURUSD | 2021-08-29 | [ECB out-doving the Fed boosts euro's allure as funder of carry trades - The Business Times](https://feedsoft.ai/events/45767-ecb-out-doving-the-fed-boosts-euro-s-allure-as-funder-of-carry-trades-the.md) | +0.8% | -0.8% |
| EURUSD | 2025-03-20 | [EUR/USD weakens as Fed sees no rush for interest rate cuts](https://feedsoft.ai/events/25794-eur-usd-weakens-as-fed-sees-no-rush-for-interest-rate-cuts.md) | -0.9% | +4.6% |
| EURUSD | 2022-07-27 | [Forex: Euro fragile as Fed hike looms, Aussie hike bets retreat \| Khaleej Times](https://feedsoft.ai/events/40743-forex-euro-fragile-as-fed-hike-looms-aussie-hike-bets-retreat-khaleej-times.md) | +0.8% | -1.4% |

## Sources

- fxstreet.com: https://www.fxstreet.com/news/euro-folds-as-the-fed-trades-cuts-for-hikes-202606171818

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Data from Feedsoft AI (https://feedsoft.ai/). For information only; not investment advice.