Euro Falls to Three-Month Low Against the US Dollar
As inflation concerns triggered by geopolitical risks in the Middle East and central bank policies strengthen the dollar, the euro-dollar parity has dropped to a three-month low.
Against the dollar, which has strengthened due to geopolitical risks in the Middle East and inflation concerns, the euro-dollar parity fell to 1.1332, recording its lowest level since June 24.
Geopolitical Risks and Inflation
The negative reflections of geopolitical risks in the Middle East on energy supply are among the primary factors complicating economies' struggle with inflation.
Rising oil prices increase the probabilities that central banks globally may accelerate the tightening process in their monetary policies.
Central Bank and Interest Rate Expectations
Ongoing inflation concerns support predictions in money market pricing that the bank could undertake another rate hike by the end of the year.
While market pricing indicates that the Fed could continue its hawkish steps into next year, an interest rate hike is not expected at the October meeting.
Employment Data and Markets
The employment report to be released on Wednesday and Friday's non-farm payrolls data are expected to have an impact on these expectations.
Signals regarding the state of the labor market, particularly from the non-farm payrolls data, are closely monitored by financial circles.
Latest Status of the Parity
Increasing expectations that the Fed will adopt a tighter monetary policy stance to curb inflation have caused the dollar to gain strength against other currencies.
In international markets, the euro-dollar parity fell by 0.3 percent during the day to 1.1332, seeing its lowest level since June 24.