Euro Sinks as Oil Prices Fuel Inflation Concerns and Dollar Strength

The euro remains under pressure as rising oil prices continue to fuel inflation concerns that support the U.S. dollar.

Oil prices have climbed above $90 per barrel, driven by supply disruptions and geopolitical tensions, which has raised concerns about energy costs and potential inflation.

The Federal Reserve's decision to maintain higher interest rates for longer is boosting the appeal of the dollar, while the European Central Bank's more dovish stance amid sluggish eurozone growth is weighing on the euro.

Market participants are pricing in a lower probability of Fed rate cuts in the coming months, with the CME FedWatch indicating a 50% chance of a rate cut in June, down from nearly 70% a month ago.