EUR/USD Decline Continues as US Dollar Fueled by Tightening Expectations

The EUR/USD pair has been on the defensive for three weeks in a row, pushing it to challenge the 1.1360 region since late July.

This decline is largely due to the US Dollar's recovery following expectations of further tightening by the Federal Reserve (Fed) in the second half of the year.

The Fed's hawkish comments from officials have reinforced this view, with inflation being regarded as the main issue to be addressed.

However, despite concerns about energy prices and their impact on inflation, ECB officials flag higher inflation risks but limited wage pressure, suggesting that second-round effects remain limited for now.