HomeTop Global NewsDollar Drops to One-Year Low Against Euro

Dollar Drops to One-Year Low Against Euro

The dollar continued its slide this week after investors became increasingly confident that the Federal Reserve’s interest rate hikes are coming to an end. The U.S. currency hit its one-year low against the Euro while plunging to a two-month low against a basket of six foreign currencies.

According to official figures, the annual inflation in the U.S. has been reduced to 5% in March, coming down from 6% the month prior. The expectations are that the figure will come down to 4.40% by the end of the quarter and prompt the Fed to be less aggressive with its interest rate increases.

As a result, the U.S. dollar index came down to 101.28, its lowest mark since early February, and almost 12% compared to 2022’s high of 114.78. At the same time, Euro jumped to $1.1065, rising to its 12-month high against the dollar.

Euro is expected to continue its rise in the future, considering European Central Bank’s intention to keep raising its interest rates.

“The combination of falling U.S. inflation and rising recession risks have driven expectations of three Fed interest rate cuts this year compared to further hikes from the still-hawkish ECB,” eToro’s global markets strategist Ben Laidler told Reuters.

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