EUR/USD Tumbles Amid Fed-ECB Divergence and Strong Dollar

The EUR/USD pair has fallen to a 10-week low as the US dollar strengthens and despite stronger-than-expected Eurozone PMI data. The euro's value has decreased by around 2.4% over the past month, with business activity in the Eurozone growing at a faster pace in September.

The Eurozone PMI data showed that business activity rose to 53.0, up from 51.6 in August and ahead of expectations of 51.7. However, the euro's value is being pressured by the increasing divide between the Federal Reserve and the European Central Bank (ECB).

The Fed has hiked interest rates by 25 basis points and signalled that another rate hike could come before the end of the year, supporting the greenback to a seven-week high. In contrast, the ECB faces the challenge of keeping inflation under control while avoiding unnecessary pressure on the fragile economy.