EUR/USD Soars as Fed Rate Hike Expectations Weaken Dollar

The EUR/USD currency pair has continued its upward trend, reaching fresh multi-week highs as the US dollar weakens. This shift in market sentiment is driven by growing expectations that the Federal Reserve may slow down its pace of rate hikes.

Meanwhile, the European Central Bank has maintained a hawkish tone, signaling further tightening to combat persistent inflation. Economic data from the eurozone has also provided support, with recent PMI readings and employment figures showing resilience despite headwinds from high energy costs and global trade tensions.

The technical outlook for EUR/USD is bullish, with the pair breaking above its 50-day moving average. However, traders remain cautious ahead of key central bank meetings and inflation data due later this week, which could inject volatility.