The Euro declines 0.23% against the Dollar as markets price in higher odds of two Fed rate hikes this year.
The Euro (EUR) dropped 0.23% to 1.1444 against the US Dollar (USD) in European trading on Monday, pressured by rising expectations of Federal Reserve rate hikes. The US Dollar Index (DXY) climbed 0.25% to near 101.00, reflecting broad Greenback strength.
Hawkish Fed sentiment surged after Wednesday’s policy announcement, where nine of 19 policymakers backed rate hikes in 2024—up from none in March. The Fed’s dot plot now projects a year-end federal funds rate of 3.6%, up from 3.1%. Markets assign a 58.5% probability of at least two hikes, per the CME FedWatch tool.
Investors await May’s PCE data on Thursday for further clues on US monetary policy. Eurozone markets focus on June’s preliminary HCOB Composite PMI, due later this week.