EUR/USD Plunges as Fed Rate Hike Expectations Reach New High

The EUR/USD pair has declined by nearly 0.81% over the last four trading sessions, reinforcing a bearish bias in favor of the U.S. dollar.

Market expectations have shifted toward a more hawkish Federal Reserve, with a greater than 92% probability of a 25-basis-point rate hike expected tomorrow.

This perceived increase in interest rates is supported by still-persistent inflation, a resilient labor market, and an economy that can sustain higher interest rates over the coming months.