07:45 AM EST, 12/10/2025 (MT Newswires) -- The US dollar fell against its major trading partners early Wednesday as markets prepare for the Federal Open Market Committee's rate decision at 2:00 pm ET and Federal Reserve Chairman Jerome Powell's press conference at 2:30 pm ET.

The CME's FedWatch Tool currently shows an 89.6% chance being priced in for a 25 basis point rate reduction in the target federal funds rate to 3.50% to 3.75% and a 10.4% chance of no change to the current 3.75% to 4.00% range.

Prior to the meeting, the delayed employment cost index for Q3 is due to be released at 8:30 am ET, followed by weekly oil stocks inventory data at 10:30 am ET and the Treasury's monthly budget statement for November at 2:00 pm ET.

Earlier Wednesday, the Mortgage Bankers Association said mortgage applications rebounded in the week ended Dec. 5, lifted by a surge in refinancing activity partially offset by a decline in purchase applications.

A quick summary of foreign exchange activity heading into Wednesday:

EUR/USD rose to 1.1635 from 1.1627 at the Tuesday US close but was below a level of 1.1644 at the same time Tuesday morning. There are no Eurozone data on Wednesday's schedule, but European Central Bank President Christine Lagarde said earlier Wednesday that the ECB is likely to lift its growth forecasts at its meeting next week, according to Reuters. The next European Central Bank meeting is scheduled for Dec. 18.

GBP/USD rose to 1.3312 from 1.3300 at Tuesday US close but was below a level of 1.3324 at the same time Tuesday morning. There are no UK data on Wednesday's schedule. The next Bank of England meeting is scheduled for Dec. 18.

USD/JPY fell to 156.7382 from 156.8870 at the Tuesday US close but was above a level of 156.2856 at the same time Tuesday morning. Japanese business conditions declined in December while Japanese producer prices rose as expected in November, according to data released overnight. The next Bank of Japan meeting is scheduled for Dec. 18-19.

USD/CAD fell to 1.3845 from 1.3851 at the Tuesday US close and 1.3846 at the same time Tuesday morning. The next Bank of Canada is expected to hold its target rate steady in its post-meeting statement to be released at 9:45 am ET, followed by a press conference at 10:30 am ET and Canadian consumer confidence data at 11:00 am ET.