Euro Plunges Against USD as FOMC Looms, 5% Treasury Yield Threshold in Sight

The Euro (EUR) has continued to struggle against the US Dollar (USD), trading below mid-1.1500s for the fourth consecutive day.

This bearish trend is attributed to the USD's bullish bias ahead of the two-day FOMC policy meeting, which commences today.

US Federal Reserve (Fed) rate hike expectations and inflation risks stemming from higher energy prices have kept US bond yields near multi-year highs, contributing to the safe-haven buck's strength.

ING's Padhraic Garvey warns that the Fed will be mindful of mounting pressure along the curve, with the 10-year US Treasury yield nearing the key 5% threshold.

The geopolitical risk premium remains in play due to ongoing tensions between the US and Iran, supporting crude oil prices and the USD.