The euro held steady just above $1.165, hovering near its strongest level since mid-October, as traders absorbed hawkish comments from ECB Executive Board member Isabel Schnabel while awaiting a widely expected Federal Reserve rate cut later this week. Schnabel said she is comfortable with market bets that the ECB’s next policy move could be a rate increase, noting that risks to both growth and inflation are now tilted to the upside. She also suggested that updated economic projections in December may be revised higher. Her remarks, combined with resilient economic activity and inflation running close to target, reinforced expectations that the ECB is likely to keep rates unchanged through 2026. Across the Atlantic, US markets are pricing in roughly a 90% chance that the Fed will deliver a 25-basis-point cut on Wednesday, with investors looking for an additional two to three cuts next year as recent data continues to indicate a cooling labor market.