• EUR/USD appreciates as markets are split over the scale of the Fed’s upcoming rate cut.
• ECB Governing Council member Gabriel Makhlouf said that the central bank is still operating in a "highly uncertain environment".
• Rabobank suggests that unfavorable Eurozone fundamentals will likely limit the upside potential for the EUR/USD pair.

EUR/USD starts the week on a positive note, edging higher to trade around 1.1090 during the Asian session on Monday. Investors are now focused on the highly-anticipated policy decision from the US Federal Reserve (Fed) later this week. Markets remain divided on whether the Fed will cut rates by 25 basis points (bps) or 50 bps.

According to the CME FedWatch Tool, markets anticipate 48.0% odds of a 25 basis point (bps) rate cut by the Federal Reserve at its September meeting. The likelihood of a 50 bps rate cut has increased to 52.0%, up from 50.0% a day ago.

Investors will closely watch the FOMC Press Conference for insights into the future of US interest rates. If Fed Chair Jerome Powell signals a more aggressive easing approach, it could put downward pressure on the US Dollar, providing a potential boost to the EUR/USD pair.

European Central Bank (ECB) Governing Council member and Central Bank of Ireland Governor Gabriel Makhlouf stated on Friday that the central bank is still operating in a "highly uncertain environment" and will rely on data to guide future monetary policy decisions. Makhlouf emphasized that the ECB is not committing to a specific rate path but remains "determined to ensure" that inflation in the Eurozone returns to the 2% target "in a timely manner."