Euro declines as US Dollar recovers recent losses amid hawkish Fed tone | FXStreet

The euro held steady under pressure as the US dollar rebounded amid a more hawkish Federal Reserve tone. EUR/USD traded around 1.1460 during Tuesday’s European session for a second straight day of losses. FX commentary linked the move to Fed messaging that inflation is likely to stay well above the 2% target for the next 18 months without additional policy restraint. Fed official Musalem’s remarks—scoring 8/10 on FXS Speechtracker—favored “earlier and incremental” rate hikes. At the same time, improved Middle East diplomacy hopes and attention on an upcoming US-China summit could lift risk sentiment, creating headwinds for the dollar.