The euro extended losses below $1.15, hitting its weakest level since mid-June, as investors digested a slew of economic data and turned their attention to the Federal Reserve’s policy decision on Wednesday.
New Eurostat figures showed the Eurozone economy grew a modest 0.1% in Q2, slowing sharply from 0.6% in Q1 but still exceeding expectations of no growth.
Meanwhile, the US dollar gained strength following strong Q2 GDP numbers and robust July private employment data.
On the trade front, investor sentiment remained cautious amid concerns that the recently announced U.S.-EU trade agreement disproportionately benefits the US, providing little boost to the eurozone’s sluggish outlook.
Expectations for European Central Bank rate cuts have also been pushed further out.
Markets now assign a 90% probability of a 25-basis-point cut by March 2026, while the likelihood of a move in December has fallen to 30%.