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Euro falls below 1.1400 as Fed rate-hike expectations firm up USD

EUR/USD traded near 1.1380 as traders increasingly priced a roughly 69.7% chance of a 25 bps Fed hike in October, according to CME FedWatch.

Reported · Written up by our desk · Major Pairs

FXStreet said EUR/USD slid to around 1.1380 in early Asian trading on Thursday, extending losses after hawkish signals from the US Federal Reserve strengthened the US dollar versus the euro.

The article pointed to recent US data, noting that preliminary S&P Global Manufacturing PMI rose to 52.0 in September from 51.7 in August, while Services PMI eased to 51.7 from 52.5 and the Composite PMI fell to 51.7 from 52.5.

FXStreet also cited Fed comments, including Governor Michael Barr saying further policy adjustments may be needed to control inflation, along with support for the recent rate increase from Fed President Tom Barkin and Boston Fed President Susan Collins.

Market pricing remains a key driver, the outlet added, with CME FedWatch showing nearly a 69.7% chance of a quarter-point hike in October, up from 48.7% a week earlier, while the ECB said it could raise rates again if high energy costs spread beyond energy prices.

Latest closeEUR/USD 1.138 ▼0.6%

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