The EURUSD rate outlook is anticipated to be impacted by the Fed's rate decision.

Following the European Central Bank (ECB) meeting, the EURUSD broke the current trend of higher highs and lower lows. However, given that the Federal Reserve is expected to undertake another 75bp rate hike, the exchange rate may find it difficult to maintain its gains from the monthly low (0.9632).

The ECB emphasizes that the Governing Council has "made substantial progress in withdrawing monetary policy accommodation," but the EURUSD is still falling from a new monthly high (1.0094), and it appears that President Christine Lagarde and her team are unlikely to pursue a tightening of monetary policy given that the Euro Area's economic activity is anticipated to deteriorate over "the remainder of this year and the beginning of next year."

Contrarily, the US Personal Consumption Expenditure (PCE) Price Index update indicates another increase in the Fed's preferred inflation gauge, suggesting that the Federal Open Market Committee (FOMC) may maintain its aggressive forward guidance at its next interest rate decision on November 2.

As a result, the FOMC may continue to pursue its strategy for containing inflation because "many participants emphasized that the cost of taking too little action to bring down inflation likely outweighed the cost of taking too much action," and because the Non-Farm Payrolls (NFP) report indicates a robust labor market, the committee may be more willing to implement a highly restrictive policy.

In light of the fact that the FOMC intends to continue raising interest rates until 2023, another 75 basis point Fed rate hike as well as hawkish forward guidance may weigh on the EURUSD.