Euro Slips Below $1.15 Amid Fed Rate Hike Tension

The euro to dollar rate has seen significant fluctuations after the Federal Reserve raised rates. The ECB reference rate for Friday was $1.1460, down 1.14% from September 11. This move is notable as both central banks tightened by 25 basis points, but the Fed's upper bound remains 150 basis points above the ECB deposit rate.

The gap between the two rates changes hedging math for importers, exporters, and global funds. A €100,000 receipt converts to $114,600 at Friday's reference rate, down from $115,920 one week earlier.

Ebury strategist Matthew Ryan believes that a near-term test of 1.14 is possible due to higher oil prices and safe-haven demand. However, Sucden Financial analysts see scope for a corrective rebound toward 1.1580-1.1600.