Euro Falls Further as US Dollar Recovery Gains Momentum

The euro continued its decline against the US dollar on Thursday, marking a third consecutive session of losses. The pair's drop is attributed to a strengthening greenback, which has been fueled by robust economic data and reduced expectations of aggressive interest rate cuts from the Federal Reserve.

According to the CME FedWatch tool, markets now price in a roughly 60% chance of a quarter-point cut in September, down from over 70% a week ago. This shift in sentiment has contributed to the dollar's recovery, which saw the US Dollar Index (DXY) rise to a two-week high.

The eurozone's economic softness, as reflected in recent PMI readings below expectations, and the European Central Bank's cautious approach to policy easing have also weighed on the euro. From a technical perspective, EUR/USD has broken below its 50-day moving average, signaling further selling pressure.