Euro falls to one-month low as Dollar gains ahead of Fed decision
The Euro slipped to a one-month low against the US Dollar as rising oil prices, stronger US rate expectations and risk-off sentiment boosted the greenback.
The Euro weakened on Monday as the US Dollar strengthened broadly amid rising geopolitical risk and higher oil prices. EUR/USD fell to around $1.153, its lowest level in a month.
The Dollar benefited from safe-haven demand after renewed Middle East tensions pushed Brent crude toward $108 a barrel. Higher energy costs are raising concerns about inflation and reducing appetite for risk-sensitive currencies.
Investors are also preparing for the Federal Reserve's upcoming policy decision. Money markets are pricing a high probability of a rate increase, giving the Dollar an additional yield advantage over the Euro.
The Euro remains sensitive to both energy-market developments and relative central-bank expectations. A more hawkish Fed could keep EUR/USD under pressure, while any moderation in US tightening expectations could allow the pair to recover.
Key Takeaways
- EUR/USD dropped to around $1.153, a one-month low.
- Higher oil prices are increasing inflation and risk-off concerns.
- Strong Fed hike expectations are supporting the Dollar.
- Relative Fed-ECB policy expectations remain crucial for EUR/USD.
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