EUR/USD Falls as Fed Hawkishness Boosts US Dollar

The EUR/USD pair lost ground on Thursday, extending its downside as hawkish signals from the US Federal Reserve boosted the US Dollar against the Euro. In early Asian trading hours, the major pair softened to around 1.1380.

The prospect of US interest rate hikes supports the US Dollar's strength, with markets pricing in a nearly 69.7% chance that the Fed would hike rates by a quarter percentage point in October, up from 48.7% one week ago.

European Central Bank policymaker Gabriel Makhlouf stated that the central bank may raise interest rates again if high energy prices begin to spread to prices in other sectors, but so far, there is no sign of such second-round inflation effects.