Euro Hits Two-Month Low Amid Interest Rate Pressures

The euro has fallen to a two-month low against the US dollar, extending its losses for the third consecutive day. The decline is attributed to negative pressures related to interest rate differentials between Europe and the United States.

Investors are awaiting key data releases on European sectors, which will provide clues about economic growth in the third quarter of this year. This reassessment of expectations for European interest rates may impact the probability of an ECB interest rate hike in October.

The US dollar has gained strength against a basket of major currencies, supported by demand for the currency as the most attractive investment amid the Federal Reserve's hawkish stance. The probability of a 25-basis-point rate hike at the next Fed meeting stands at 55%, while the probability of leaving rates unchanged is 45%.