EUR/USD: Dollar Retreats Ahead of Stacked Week

It’s the week of the Fed with another rate hike on the horizon. But it may not be so simple after all.

• The EUR/USD moved higher on Friday, after renewed bank jitters sparked concerns that the US financial system may not be as stable as projected. The euro closed the day higher at $1.0664, but still lagged behind the dollar in its weekly performance as fears got the best of it.
• What happened last week? A looming banking crisis threw investors off as First Republic Bank collapsed under the selling pressure and Credit Suisse reached out to bigger rival UBS with pleas to get acquired and ensure its survival. Mixed US data also added to the scramble.
• Down the line, it’s a stacked week for the EUR/USD. The thunder hits Wednesday when the Federal Reserve is gearing up to announce its latest interest rate decision. Prior to the market turmoil, the Fed was planning a 25 bps hike. But some are saying the central bank might hold off for the moment.