Euro May Slide Below $1.10 as Fed Rate Bets Lift Dollar
ING's Francesco Pesole says the euro risks falling below $1.10, but markets would first need to seriously weigh a 50bp Fed hike in December.
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what happened
According to Market Talk, citing LSEG, the euro reached an 18-month low of $1.1065 overnight. ING's Francesco Pesole says the single currency could fall below $1.10 in the coming days. A decisive move lower, however, would probably require markets to seriously consider a 50 basis point Fed rate hike in December. "That looks like a stretch for now," he said.
LSEG data show markets price a 9% chance of a 50bp Fed hike in December and a 90% chance of a 25bp move. Expectations were lifted by higher-than-expected U.S. inflation data and comments from Fed Governor Christopher Waller on the prospect of more aggressive tightening earlier this week.
The DXY dollar index hit a 19-month high of 103.083, while the euro trades near $1.1092.
why it matters
Fed rate expectations remain the main driver in currency markets, as a higher odds of tightening make the dollar more attractive and weigh on the euro. Sterling barely reacted to stronger-than-expected September UK GDP data, and Indonesia's rupiah has hit a record low. Bitcoin is down 16% and spot gold 7% year to date.
market impact
Euro and pound: a firmer dollar on Fed rate bets pressures EUR/USD and GBP/USD.
- EUR/USD pressure down — expectations of tighter Fed policy strengthen the dollar
- DXY pressure up — rising Fed rate-hike bets support the dollar index
tags
instruments
on polymarket
sources
- Euro Could Extend Recent Losses Against Dollar — Market Talk, 12 November 2026 at 09:42 UTC
- Euro Could Extend Recent Losses Against Dollar — Market Talk, 12 November 2026 at 09:42 UTC
prepared by the newsmetry newsroom with ai assistance from the sources listed below. not investment advice.
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