Euro Extends Losses as Markets Price in Aggressive Rate Hikes

The EUR/USD pair has seen significant losses over the past four trading sessions, declining by nearly 0.81%. This move is reinforcing a bearish bias in favor of the US dollar.

Market expectations have shifted towards a more aggressive Federal Reserve, with investors anticipating higher interest rates. The Fed's decision tomorrow will be a key focus for markets, and it's likely to support demand for USD-denominated investments.

The probability of a 25-basis-point rate hike has risen to over 92%, and expectations are extending to subsequent policy meetings. This suggests investors are no longer expecting just one-off rate increases but rather the beginning of a more aggressive tightening phase from the Federal Reserve.