• EUR/USD weakens to around 1.0850 in Thursday’s Asian session. 
• Traders expect that the Fed will proceed with modest interest rate cuts over the next year. 
• The ECB is widely expected to cut interest rates at its October meeting on Thursday. 

The EUR/USD pair extends its decline to near 1.0850 during the early Asian session on Thursday. The further upside of the Greenback exerts some selling pressure on the major pair. Investors will closely monitor the European Central Bank (ECB) monetary policy meeting, which is expected to lower interest rates again on Thursday. 

The Federal Open Market Committee (FOMC) at its September meeting took the unusual step of lowering its benchmark interest rate by a half percentage point to a target range of 4.75% to 5.00%. However, investors now anticipate that the Federal Reserve (Fed) will proceed with modest interest rate cuts over the next year, which underpin the Greenback broadly. 

Fed Governor Christopher Waller said on Monday that future interest rate cuts will be less aggressive than the large move in September, as he is concerned that the economy could still be running at a hotter-than-expected pace. Later on Thursday, investors will take more cues from the US Retail Sales data, which is expected to rise from 0.1% in August to 0.3% in September.