Euro weakens to near 1.1450 as Fed raises rate for first time in three years
The EUR/USD pair declines to around 1.1460 during Asian trading hours on Thursday. The Euro (EUR) weakens against the US Dollar (USD) following an interest rate hike from the US Federal Reserve (Fed). The US Initial Jobless Claims data will be released later on Thursday.
The Euro (EUR) experienced a decline to approximately 1.1460 against the US Dollar (USD) during Asian trading hours on Thursday. This occurred following an interest rate hike from the US Federal Reserve (Fed) by 25 basis points (bps) to a 3.75%-4.00% range at its September policy meeting. The Fed's decision marked the first rate increase in three years.
In response to the Fed's move, the European Central Bank (ECB) also raised its key interest rates by 25 bps last week. ECB President Christine Lagarde affirmed that Eurozone inflation will remain elevated for some time and acknowledged the divergence in rate pricing. Strategists from Rabobank noted that the ECB is already moving away from the pace of market repricing, indicating that the market may be reacting faster than policymakers.
Meanwhile, the USD continues to benefit from relatively high interest rates, making it more attractive for global investors.
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