EUR/USD gains momentum above 1.1700 ahead of ECB's Lagarde speech

• EUR/USD trades firmer around 1.1705 in Monday's Asian session. 
• Traders now see an 89% chance that Fed will lower its benchmark rate by 25bps at the September meeting. 
• Von der Leyen said Europe has a 'pretty precise' plan to send troops to Ukraine.

The EUR/USD pair trades on a stronger note near 1.1705 during the Asian trading hours on Monday. The rising rate cut expectation from the US Federal Reserve (Fed) continues to weigh on the Greenback against the Euro (EUR). Later on Monday, the European Central Bank (ECB) President Christine Lagarde is scheduled to speak. 

The Personal Consumption Expenditures (PCE) Price Index came in line with the expectations in July, according to the US Bureau of Economic Analysis. The headline PCE rose 2.6% YoY in July, while core PCE, which excludes the more volatile food and energy, climbed 2.9% in the same report period. Despite the hot inflation report, traders still ramp up their bets of a Fed rate reduction this month. 

Fed Chair Jerome Powell hinted in his Jackson Hole address earlier this month that the Fed is open to easing policy. Hawkish Fed Governor Christopher Waller also signaled that a rate cut is appropriate, saying he would entertain a larger move if labor market data continue weakening.

Traders are now pricing in nearly an 89% possibility of a 25 basis points (bps) rate cut by the Fed at the September policy meeting, up from an 85% chance before the US PCE data, according to the CME FedWatch tool.

Across the pond, the escalating tensions between Russia and Ukraine might drag the EUR. The European Commission President, Ursula von der Leyen, said that European countries are working on "pretty precise plans" for potential military deployments to Ukraine as part of post-conflict security guarantees that will have the full backing of US capabilities. 

Persistent conflict between Russia and Ukraine implies higher energy costs and increases geopolitical uncertainty in the Eurozone, which generally exerts some selling pressure on the EUR.