Euro Near Two-Month Low as Dollar Strengthens
The euro remained below $1.14, hovering near its weakest level in nearly two months, as the dollar strengthened amid expectations that the Federal Reserve could deliver further interest rate hikes this year following stronger-than-expected US PMI data and a series of hawkish remarks from Fed policymakers. Rising oil prices, amid persistent uncertainty surrounding US-Iran talks, also weighed on risk-sensitive assets. Meanwhile in Europe, data showed that German business sentiment improved more than expected in September, reaching its highest level in more than three years, following stronger-than-expected PMI data released on Wednesday. Eurozone private-sector activity also expanded at its fastest pace in nearly three and a half years, reinforcing expectations of further monetary tightening by the European Central Bank. Money markets are now pricing in at least one 25-basis-point ECB rate hike by year-end, with around a 40% probability of a second.
14, hovering near its weakest level in nearly two months, as the dollar strengthened amid expectations that the Federal Reserve could deliver further interest rate hikes this year following stronger-than-expected US PMI data and a series of hawkish remarks from Fed policymakers. Rising oil prices, amid persistent uncertainty surrounding US-Iran talks, also weighed on risk-sensitive assets. Meanwhile in Europe, data showed that German business sentiment improved more than expected in September, reaching its highest level in more than three years, following stronger-than-expected PMI data released on Wednesday.
Eurozone private-sector activity also expanded at its fastest pace in nearly three and a half years, reinforcing expectations of further monetary tightening by the European Central Bank. Money markets are now pricing in at least one 25-basis-point ECB rate hike by year-end, with around a 40% probability of a second.