EUR/USD holds losses near 1.1700 amid rising odds of Fed rate cut bets

• EUR/USD edges lower as the US Dollar gains ground on the increasing likelihood of Fed rate cuts.
• CME FedWatch Tool prices in 95% odds of an October Fed cut and 84% for December.
• The Euro could find continued support amid prospects of a cautious policy approach by the ECB.

EUR/USD retraces its recent gains registered in the previous session, trading around 1.1720 during the Asian hours on Monday. The pair depreciates as the US Dollar (USD) amid rising likelihood of the US Federal Reserve (Fed) rate cuts in the upcoming meetings. The CME FedWatch Tool suggests that markets are now pricing in a 95% chance of a Fed rate cut in October and an 84% possibility of another reduction in December.

The upside of the Greenback could be restrained as concerns rise after United States (US) Senators failed to pass spending proposals to reopen the federal government for a fourth time, extending the ongoing shutdown into a new week. The closure has suspended key federal programs and delayed major economic reports, including September's jobs data originally due Friday.

The EUR/USD pair may regain its ground as the Euro (EUR) could continue to draw support from the potential for a cautious policy stance from the European Central Bank (ECB). ECB policymaker Martins Kazaks said last week that the current level of interest rates is "very appropriate" and can be maintained. Kazaks added that uncertainty remains very high and must retain full freedom of action.

Traders would likely observe speeches from European Central Bank (ECB) Vice President Luis de Guindos and ECB Executive Board member Philip Richard Lane later in the day. Focus will shift toward Eurozone Sentix Investor Confidence and August Retail Sales data.