Euro strengthens to dollar ahead of ECB meeting

The US dollar retreated further on Wednesday as the euro extended its overnight bounce on the chance the European Central Bank may deliver a more aggressive rate hike.

Report informs, citing Reuters, that the euro tacked on 0.25% to $1.0245, having risen 0.75% the previous day, its strongest daily gain in a month.

Aiding sentiment was news that the ECB is considering raising interest rates by a larger-than-expected 50 basis points at their meeting on Thursday.

The euro has lost about 2.3% since the beginning of July, and broke parity with the dollar for the first time in two decades last week following a red-hot U.S. inflation print and fears about a sharp economic downturn in the eurozone. read more

Other major currencies similarly rallied on the back of the weakening greenback, and as central banks around the world become more hawkish in their efforts to tame soaring inflation.