EUR/USD flat-lines above the mid-1.0800s, all eyes on Fed rate decision

• EUR/USD trades flat around 1.0865 near multi-week lows amid the consolidation of the USD. 
• The FOMC is expected to hold the interest rate and maintain macroeconomic projections at its March meeting on Wednesday. 
• The Eurozone ZEW Economic Sentiment came in at 33.5 in March vs. 25.0 prior, better than expected. 
• The FOMC monetary policy meeting will be in the spotlight on Wednesday. 

The EUR/USD pair trades on a flat note above the mid-1.0800s during the early Asian session on Wednesday. Meanwhile, the USD Index (DXY) consolidates its gains near three-week highs of 103.80. Traders await the Federal Open Market Committee's (FOMC) monetary policy meeting later in the day and will take more cues from Chairman Jerome Powell’s press conference and economic projections after the meeting. At press time, the major pair is trading at 1.0865, unchanged for the day. 

The Federal Open Market Committee (FOMC) is widely expected to keep its key federal funds interest rate unchanged in a range of 5.25% to 5.5%.and maintain macroeconomic projections at its March meeting on Wednesday. Analysts anticipate FOMC’s Powell to reiterate that the central bank wants to see evidence of inflation data in its battle against inflation before cutting rates. Financial markets expect a 25 basis points (bps) rate cut in July and total cuts of 100 bps this year. The US Dollar (USD) has attracted some buyers in the last sessions as the market’s expectations for rate cuts have been dialed back. 

Across the pond, the ZEW Economic Sentiment for the Eurozone rose to 33.5 in March from the previous reading of 25.0, above the market consensus of 25.4. Meanwhile, the Economic expectations for Germany improved to 31.7 versus 19.9 prior. The reports suggested a more optimistic outlook for the Eurozone and Germany. However, the survey failed to boost the Euro (EUR) as traders prefer to wait on the sidelines ahead of the FOMC interest rate decision. 

The European Central Bank (ECB) President Christine Lagarde is set to speak on Wednesday, and the European Commission will release its flash Consumer Confidence report for March. The FOMC monetary policy meeting will take center stage later on Wednesday. After the meeting, the attention will turn to Powell’s press conference, which might provide information on the central bank's outlook.