EUR/USD Strengthens on Weaker USD, But Fed Hike Cools Optimism

The EUR/USD pair has strengthened to near 1.1500 due to a weaker US Dollar, but its potential upside may be limited by the Federal Reserve's recent interest rate hike.

The Fed raised its benchmark interest rate by a quarter-percentage point to a range of 3.75% to 4%, marking its first increase since July 2023 as it continues to fight inflation.

Meanwhile, the European Central Bank (ECB) also lifted its key deposit rate by 25 basis points to 2.50% last week in a move widely expected by investors.