EUR/USD Slumps as Fed and ECB Hikes Loom

The EUR/USD currency pair is currently trading near its weakest level in a month, sitting at 1.1540 and down 2.41% from last year's price of 1.1825.

The European Central Bank (ECB) raised its deposit rate by 25 basis points to 2.50% on September 10, with the new rates taking effect today, September 16.

The Federal Reserve is also expected to raise interest rates by 25 basis points to 3.75-4.00%, which would be its first hike since July 2023.

Markets are pricing in two Fed hikes in 2026 at 79% and three hikes at 30%, with the ECB's deposit rate expected to reach 2.90% by December and 3.40% by November 2027.