Euro Tumbles Below 1.15 as Fed Hikes Interest Rates

The Euro to US Dollar exchange rate (EUR/USD) dropped below 1.15 after the Federal Reserve raised interest rates by 25 basis points, a move that was widely expected.

As of late Wednesday, the EUR/USD was trading at 1.1462, down 0.65% on the day.

The Fed's unanimous decision to increase its target range to 3.75%-4.00% reflects its efforts to combat high inflation and maintain economic growth.

RBC expects two additional rate hikes in 2026, which would fully reverse last year's insurance cuts.

This move is seen as a response to the Fed's higher growth and inflation projections, as well as lower unemployment forecasts.