Short-covering in the USD and hawkish Fed expectations push EUR/USD down from a six-week high near 1.1537.
The Euro fell below 1.1500 against the US Dollar on Friday, retreating to around 1.1488 as the Greenback recovered from Thursday’s sell-off. The US Dollar Index (DXY) rose 0.37% to 100.34, supported by hawkish Federal Reserve sentiment and geopolitical tensions in the Middle East.
EUR/USD had earlier touched a six-week high of 1.1537 but reversed course as traders priced in a 66% chance of a 25-basis-point Fed rate hike in September, per the CME FedWatch Tool. The Fed held rates steady at 3.50%-3.75% on Wednesday, though three policymakers dissented, favoring an immediate hike.
Market focus now shifts to upcoming University of Michigan Consumer Sentiment and Inflation Expectations data, which could further influence Fed policy expectations.