The Euro steadies near 1.1460 after hitting three-month lows, as Fed rate hike bets lift the Dollar but Juneteenth holiday tempers gains.
The Euro (EUR) held near 1.1460 against the US Dollar (USD) on Friday, recovering marginally from three-month lows at 1.1420. The pair remains on track for a 0.9% weekly decline amid rising expectations of Federal Reserve rate hikes, which have bolstered the Dollar across major currencies.
US Dollar bulls paused ahead of the Juneteenth holiday, limiting further gains. Despite optimism over a US-Iran peace deal and falling oil prices, the Euro struggled to extend its rebound. Markets anticipate lower energy costs may reduce pressure on the European Central Bank to continue hiking rates, while the Fed’s hawkish stance supports the Greenback.
Fed projections this week showed nearly half of policymakers expect at least one rate hike in 2024. Strong US economic data, including better-than-expected retail sales and a rebound in the Philadelphia Fed Manufacturing Survey, reinforced expectations of tighter monetary policy.