Euro Slips Below 1.15 as Dollar Recovers on Hawkish Fed Expectations

The Euro weakened against the US Dollar on Friday, dropping below 1.1500 as short-covering in the Greenback pushed the EUR/USD pair back down.

The US Dollar Index (DXY) rose 0.37% to 100.34, with traders still expecting a rate hike from the Federal Reserve later this year due to elevated oil prices and inflation risks.

Cleveland Fed President Beth Hammack said monetary policy is not restrictive enough, while Minneapolis Fed President Neel Kashkari stated that 'if inflation remains elevated, a potential series of small policy moves would be better than waiting and concluding that bolder actions were necessary.'

The Eurozone's Harmonized Index of Consumer Prices (HICP) rose 2.9% year-over-year in July, matching forecasts and edging up from June's 2.8%. Core inflation accelerated to 2.5%, as analysts at Societe Generale noted that the latest data 'points to limited indirect spillovers from the energy shock to consumer prices so far.'