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EUR/USD falls to a two-month low near 1.1378 as Fed bets rise
EUR/USD slid to 1.1378, with markets lifting their estimate for an October Fed rate hike to about 70% from 55% the prior day, alongside higher oil prices.
EUR/USD dropped to 1.1378, extending losses as the US dollar stayed near a two-month high, according to Action Forex. The move reflects strong US economic data and renewed expectations for further Federal Reserve tightening.
The outlet cited S&P Global data showing US private sector business activity grew at its fastest pace in more than five years in September, with services and manufacturing improving while price pressures intensified. Several Fed officials also supported last week’s rate hike and again warned about inflation risks, reinforcing the hawkish tone.
Markets now estimate the probability of another October rate hike at roughly 70%, up from 55% the previous day. Action Forex also pointed to elevated oil prices, linked to uncertainty around US-Iran negotiations, as an additional factor that could keep inflation expectations elevated.
On the technical side, Action Forex said the H4 chart completed a downward move toward 1.1369 before rebounding to 1.1392, with consolidation forming between those levels. It added that a correction higher toward 1.1396 is possible before a renewed slide toward 1.1360, with indicators like MACD and Stochastic aligned with that short-term outlook.
Latest closeEUR/USD 1.138 ▼0.6%