Euro weakens toward $1.15 as dollar gains ahead of Fed hike

  • Euro fell toward $1.15 as the dollar remained supported before the Federal Reserve decision.
  • Oil prices moved well above $100 a barrel after six months of conflict involving the US, Israel and Iran.
  • ECB, Federal Reserve, Bank of England and Bank of Japan decisions are scheduled across Wednesday, Thursday and Friday.

The euro weakened toward $1.15, reaching its lowest level since mid-August, as the dollar stayed supported ahead of a widely expected Federal Reserve rate hike on Wednesday. Rising oil prices, driven by the intensifying war in the Gulf, have added to pressure on market sentiment. Oil has moved well above $100 a barrel after six months of US-Israeli conflict with Iran, keeping inflationary pressures elevated, complicating the monetary-policy outlook and prompting bouts of selling in long-dated government bonds. The ECB (European Central Bank) raised rates last week and indicated that further tightening could follow, leading markets to price four additional ECB increases by mid-2027. Investors now face decisions from the Federal Reserve on Wednesday, the Bank of England on Thursday and the Bank of Japan on Friday. The BoE (Bank of England) is widely expected to hold rates steady, but the vote is likely to be close.

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