Euro Falls Ahead of Inflation Data Amid Rising Interest Rate Hike Expectations
The euro fell against a basket of global currencies in European trading on Tuesday, resuming losses against the US dollar that had temporarily halted yesterday and moving back toward a two-week low.
The decline comes as investors await key European inflation data for August later today, which will provide further insight into the extent of inflationary pressures facing European Central Bank policymakers.
Expectations for a European interest rate hike in September have risen following media reports, with money-market pricing for a 25-basis-point ECB interest rate hike in September increasing from 50% to 75% after Reuters reported last week that the European Central Bank is preparing to raise interest rates at its upcoming September meeting.
The US dollar strengthened on the back of surging Treasury yields, with the yield on the 10-year US Treasury note jumping more than 0.6% on Tuesday and reaching a 20-month high of 4.784%, providing further support for the US currency.