EUR/USD Slumps to Three-Week Low Amid Fed Tightening Bets

The EUR/USD currency pair has extended its weekly losing streak to three weeks, dropping towards the 1.1360 area for the first time since late July.

This decline is linked to the strengthening US Dollar, which has gained nearly 4 cents from its August peak near 1.1700, despite some gains on Friday.

The Federal Reserve's decision to tighten monetary policy and the European Central Bank's (ECB) potential for additional moves have kept rate expectations high, with markets pricing in around 33 basis points of ECB tightening by year-end.

CFTC data shows that positioning has turned less negative, with euro net shorts cut to nearly 27K contracts and open interest falling to roughly 920K, indicating short-covering rather than fresh buying.