Euro Tumbles Against Dollar Amid Widening Interest Rate Gap
The euro dropped against a basket of global currencies in European trading on Tuesday, extending its losses against the US dollar for a second consecutive session and nearing a two-month low. The currency's decline was driven by concerns over a widening interest rate gap between Europe and the United States.
European Central Bank President Christine Lagarde's comments during her testimony before the European Parliament in Brussels were less hawkish than markets had expected, reducing expectations for a European interest rate hike in October.
The 10-year US Treasury yield rose 0.65% on Tuesday, extending gains for a second consecutive session and moving close to surpassing its highest level in 19 years, providing further support for the US dollar.