EUR/USD Reacts as Fed Lifts Rates to 3.75%-4.0%
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The Federal Reserve's decision to raise its benchmark rate by 25 basis points to a 3.75%-4.0% range Wednesday puts fresh pressure on EUR/USD as the policy gap with the ECB widens further.
Higher US yields typically draw capital away from the eurozone, reinforcing dollar demand and capping any near-term euro rebound attempts against the greenback.
With the Fed maintaining a hawkish tilt, EUR/USD traders are recalibrating expectations for how much further tightening could weigh on the single currency into year-end.