The U.S. dollar extended its woes touching its lowest level against the euro in more than 2-1/2 years on Wednesday. Doubts whether the Federal Reserve will raise interest rates this year and expectations for European Central Bank hawkishness lifted the single currency and weighed on the dollar.
EUR/USD hit 1.1909, its highest peak since January 2015. In contrast to the political risks and monetary policy uncertainty that have plagued the greenback, the common currency has gained support from expectations that the ECB would eventually begin phasing out its easy policy.
St. Louis Federal Reserve President James Bullard said he is opposed to further U.S. interest rate hikes by policymakers and warned that more hikes could jeopardise the Fed's achievement of its 2-percent domestic inflation target, Market News International reported on Wednesday.
While forex traders awaited Friday's July U.S. non-farm payrolls report, euro zone economic data has encouraged the view that the ECB is on a path toward tightening its monetary policy, which is considered a favorable scenario for the euro.
