Euro Weakens Under Pressure from US Dollar
The euro weakened against the US dollar in European trading on Monday (June 22nd). The EUR/USD pair fell 0.23% to around 1.1444 as selling pressure intensified. This weakening occurred as the US dollar strengthened, still supported by market expectations regarding the Federal Reserve's interest rate policy.
The US Dollar Index (DXY), which measures the greenback's strength against six major global currencies, rose 0.25% to approach 101.00. The strengthening US dollar reflects growing market confidence that the Fed still has the potential to raise interest rates at least twice this year.
These expectations strengthened following the Fed's monetary policy announcement last Wednesday. In the latest projections, nine of 19 Fed officials supported the need for an interest rate hike this year. This represents a sharp change from the March meeting, when no FOMC officials assessed the need for monetary policy tightening this year.
Furthermore, the Fed's dot plot indicates that the benchmark interest rate could potentially rise to 3.6% by the end of the year, higher than the previous projection of 3.1%. According to the CME FedWatch Tool, the probability of the Fed raising interest rates at least twice this year has jumped to 58.5%, from 17.1% a week earlier. Market participants will also be closely monitoring the US PCE inflation data for May, released Thursday, and the preliminary Eurozone HCOB Composite PMI data for June, released Tuesday. (asd)
Source: Newsmaker.id
