The Euro fell to 1.1478 USD as Fed tightening expectations and German economic concerns weighed on the currency.
The Euro extended losses to a two-month low of 1.1478 against the US Dollar, driven by rising Federal Reserve rate hike expectations and weak Eurozone economic prospects. The EUR/USD pair is set for a 0.9% weekly decline, reversing from Tuesday’s highs above 1.1600.
The Fed maintained its benchmark rate at 3.50%-3.75% but signaled a hawkish shift, removing easing bias references and projecting potential rate hikes by year-end. US Treasury yields surged post-meeting, bolstering the Dollar. Meanwhile, German IFO forecasts highlighted persistent inflation at 2.9% this year and sluggish growth of 0.8%.
Markets reacted with a stronger Dollar and weaker Euro, reflecting diverging monetary policy outlooks between the US and Eurozone.