The persistent Fed-ECB policy divergence remains the dominant driver of EUR/USD positioning, with the Federal Reserve's target range at 3.75-4.00% after its September 16 hike outpacing the ECB deposit rate at 2.50% following its September 10 move, creating a 125-150 basis point gap that supports the dollar. Recent U.S. 10-year Treasury yields above 5.15% and resilient PMI data have reinforced this dynamic, pushing the pair to two-month lows near 1.1380-1.1400 amid broad USD strength. Eurozone inflation releases scheduled for late September and October, alongside the October 28-29 central bank meetings, will test whether the gap narrows or widens further, while geopolitical risks around energy supplies add downside pressure for the euro. Market-implied paths reflect trader consensus on sustained rate differentials through year-end.