Euro Retreats from Two-Month High Amid Hormuz Uncertainty and US Inflation Data
The euro retreated from its two-month high against the US dollar on Wednesday as investors took profits and uncertainty over Strait of Hormuz negotiations and upcoming US inflation data weighed on the currency.
Global oil prices continued to rise, increasing pressure on European Central Bank policymakers to raise interest rates in September. The euro fell 0.1% against the dollar to $1.1533 from its opening level of $1.1541, while the US Dollar Index rose 0.1% for a third consecutive session.
The key US inflation data for July is due later today and will provide crucial clues about the likelihood of the Federal Reserve raising interest rates this year. If the data comes in hotter than market expectations, it could increase the probability of a Federal Reserve rate hike, extending the US dollar's gains against global currencies.