Fed-ECB Divergence Weighs on Euro Against Dollar -- Market Talk

Dow Jones06-24

0756 GMT - The recent divergence in market expectations for Federal Reserve and European Central Bank policies is driving the euro's fall to a one-year low against the dollar, MUFG Bank's Lee Hardman says in a note. "While the U.S. rate market has moved to price in multiple Fed rate hikes, the euro-zone rate market has become less confident over the need for further ECB rate hikes." The paring back of ECB rate-rise expectations was encouraged further by eurozone purchasing managers' surveys on Tuesday which highlight the economy has slowed in response to the energy price shock, he says. In contrast, the U.S. economy appears less affected with Tuesday's U.S. PMI data coming in stronger. The euro falls to as low as $1.1351. (renae.dyer@wsj.com)

(END) Dow Jones Newswires

June 24, 2026 03:56 ET (07:56 GMT)

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