Euro Hovers Near Historic Lows Amid Fed Rate Hike Expectations

The euro has been trading near its lowest level since late July, hovering around 1.1380 against the U.S. dollar.

This comes as the market anticipates a potential rate hike by the Federal Reserve in October, with a current probability of 69.7%, up from 48.7% last week.

The recent U.S. PMI data showed mixed results: manufacturing rose to 52.0 in September, exceeding expectations, but services and the composite index declined, providing fundamental support for a hawkish stance by the Fed.

Fed officials have been increasingly hawkish, with Federal Reserve Governor Michael Barr stating that 'further policy adjustments may be necessary' to bring inflation under control.