Euro Stays Rangebound vs Dollar Before FOMC Minutes

Key Moments

EUR/USD Holds Steady After Fading Rebound

The EUR/USD pair is consolidating in a tight range during the Asian session on Wednesday, unable to extend the prior day’s rebound from the 1.1800 area, which marked a one-and-a-half-week low. The currency pair is trading just under the mid-1.1800s, showing little net movement so far in the session.

Market participants appear cautious, preferring to hold back from establishing strong directional positions ahead of the release of the Federal Open Market Committee (FOMC) Minutes. The upcoming publication is expected to offer further insight into the US Federal Reserve’s potential path for interest rate cuts, a key driver for US Dollar (USD) performance and, in turn, for EUR/USD.

EUR/USD consolidates around mid-1.1800s as traders closely await the release of the FOMC minutes.

— Markets News (@MarketsDotNews) February 18, 2026

Fed Outlook, Geopolitics, and Dollar Dynamics

Prevailing expectations that the Federal Reserve will reduce borrowing costs in June and implement at least two rate cuts in 2026 are limiting USD upside. These rate-cut bets are acting as a drag on the Greenback in the near term.

In addition, concerns about the Fed’s independence, alongside indications of progress in discussions between the United States and Iran, are seen as factors that could restrain demand for the USD. Iranian Foreign Minister Abbas Araqchi told reporters that they have been able to reach a general agreement on some guiding principles to resolve the longstanding nuclear dispute. This development reduces perceived geopolitical risk and supports risk appetite, encouraging flows away from traditional safe-haven assets and leaving USD bulls on the back foot.

ECB Rate Cut Speculation Pressures the Euro

Despite the softer tone surrounding the USD, the Euro is struggling to attract sustained buying interest. Renewed speculation that the European Central Bank (ECB) may move toward rate cuts is weighing on the common currency, with those expectations strengthened by signs of ongoing economic weakness in the Eurozone.

Recent survey data underscored this backdrop. The German ZEW survey released on Tuesday showed that institutional investors’ sentiment toward Germany, the Eurozone’s largest economy, declined to 58.3 in February from 59.6 in January. Similarly, the Eurozone’s Economic Sentiment Index unexpectedly dropped to 39.4 in February, from 40.8 previously. These readings reinforce the view that growth headwinds persist, supporting the case for ECB policy easing.

FOMC Minutes: Structure and Market Relevance

The FOMC – the Federal Open Market Committee – holds 8 meetings per year to review economic and financial conditions, set the stance of monetary policy, and evaluate risks to its long-term goals of price stability and sustainable economic growth. The FOMC Minutes, issued by the Board of Governors of the Federal Reserve, serve as an important indicator of the likely direction of US interest rate policy.

Why the Minutes Matter for FX Traders

Minutes of the Federal Open Market Committee (FOMC) is usually published three weeks after the day of the policy decision. Investors look for clues regarding the policy outlook in this publication alongside the vote split. A bullish tone is likely to provide a boost to the greenback while a dovish stance is seen as USD-negative. It needs to be noted that the market reaction to FOMC Minutes could be delayed as news outlets don’t have access to the publication before the release, unlike the FOMC’s Policy Statement.