Euro Gains on Broad US Dollar Weakness Amid Ongoing Market Uncertainty
The Euro benefits from broad US Dollar weakness ahead of the European Central Bank's (ECB) rate decision, which is expected to be a quarter-point hike on Thursday. The EUR/USD pair trades around 1.1647, up 0.20% on the day.
US Dollar Index (DXY), which tracks the Greenback's value against a basket of six major currencies, trades near its lowest level since August 21 at 98.65. USD/JPY hovers near 153.35, around levels last seen in February, and has fallen about 4% so far this month.
Despite the US Dollar weakness, traders are cautious ahead of key risk events this week, including the ECB's monetary policy announcement and the latest United States inflation data. Analysts at Nomura expect that 'we do not forecast further rate hikes from the ECB after September,' but note that risks to their forecast are skewed towards further hikes due to ongoing tensions in the Middle East.