EUR/USD Price Forecast: Slides to four-week low as hawkish Fed bets accelerate

The Euro (EUR) experienced a decline to a four-week low against the US Dollar (USD) on Monday, driven by increased expectations of hawkish Federal Reserve (Fed) policies following the release of the US Consumer Price Index (CPI) data for August. The CPI data showed that headline inflation remained steady at 3.4% year-over-year, while core CPI, which excludes volatile food and energy prices, softened to 2.4% from 2.5% in July.

The increase in monthly inflation data has led to more hawkish Federal Reserve (Fed) interest rate expectations for the upcoming September policy meeting. The European Central Bank (ECB) raised interest rates last week, but did not provide any significant hints about future rate directions during today's decision.