The euro fell to $1.15, its lowest level since late March, as the US dollar strengthened broadly following the Fed’s latest monetary policy decision. While the Fed left interest rates unchanged, as widely expected, policymakers’ projections were viewed as hawkish, with around half of officials anticipating at least one rate hike in 2026. In Europe, the ECB raised interest rates by 25 basis points last week, in line with expectations, as it continues to combat elevated inflation. However, following the preliminary agreement between the US and Iran, money markets have scaled back expectations for further ECB tightening, now pricing in less than 30 basis points of additional rate hikes this year. ECB policymaker Gediminas Simkus reiterated on Wednesday that upside risks to inflation continue to justify further monetary tightening. He said he expects at least one more rate hike to help keep inflation expectations anchored.