The euro fell to a four-week low against the British pound, driven by market perceptions that the Eurozone is more vulnerable to energy price shocks compared to the UK. According to Michael Brown, a strategist at Pepperstone, investors have largely viewed recent Middle East developments through this lens since the escalation of conflict over the weekend. Brown also noted that the euro may face additional headwinds, as markets have almost fully priced in expectations for a European Central Bank interest rate hike by the end of the year. This could lead investors to factor in another risk that may hinder economic growth. The euro dropped to 0.8672 pounds.
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