The euro declines for a third session as expectations of further US monetary tightening boost the dollar, overshadowing German economic data.
EUR/USD dropped 0.39% to 1.1340 on Wednesday, extending its decline for a third consecutive day. The euro’s weakness stems from renewed strength in the US dollar, driven by market repricing of additional Federal Reserve rate hikes.
Prior to today’s move, the pair had traded near 1.1400 earlier in the week, supported by a brief improvement in German IFO business climate data. However, the impact of stronger-than-expected US economic indicators has dominated sentiment, shifting focus toward the Fed’s policy outlook.
The dollar’s rally reflects growing expectations that the Fed may maintain a restrictive stance longer than previously anticipated, contrasting with a more cautious approach from the European Central Bank.