Euro futures rally off monthly lows as Fed rate expectations shift.

Euro futures recently rebounded from new monthly lows near 1.1350 to close the session higher. The shift in momentum occurred as the dollar retreated in the broader market. Market participants are currently recalibrating their expectations for tomorrow's FOMC meeting, with the probability of a near-term rate hike dropping from nearly 40% to closer to 20%. The market focus is now shifting toward the September meeting. Meanwhile, CVOL data indicates that volatility remains elevated as market uncertainty persists. Additionally, speculators have continued to increase their net short positions, pushing them to the highest levels seen since February 2025.