Fed Hike Sinks EUR/USD to Multi-Month Lows

The Federal Reserve's decision to hike interest rates for the first time in over three years has sent shockwaves through the markets, with the EUR/USD pair plummeting to multi-month lows.

In a unanimous vote, the FOMC raised rates by 0.25%, validating the hawkish shift in market pricing seen heading into the decision. The updated economic projections also revealed stronger growth and lower unemployment, but persistently high inflationary pressures.

The front-end yields surged, driving a sharp bear flattening of the US Treasury curve. The US dollar strengthened rapidly, putting pressure on all G10 FX names, including the euro.