▸ Euro climbs to four-year high against dol­lar ahead of Fed rate decision

▸ Treas­ury yields fall des­pite stronger than expec­ted US retail sales data

▸ Wall Street’s blue-chips edge lower but European stocks hit by big­ger losses

The euro reached a four-year high against the dol­lar yes­ter­day ahead of a highly anti­cip­ated US Fed­eral Reserve interest rate decision due today.

The single cur­rency climbed 0.8 per cent against the dol­lar to $1.186, its highest level since Septem­ber 2021. The move takes the euro's gain for the year so far to more than 14 per cent.

The US Dol­lar index, which meas­ures the strength of the cur­rency against a bas­ket of six rivals includ­ing the euro and the pound, slipped 0.6 per cent.

The dol­lar is hov­er­ing around a threeyear low as investors wait to hear from the Fed's poli­cy­makers.

“The dol­lar has struggled over recent weeks as US interest rate expect­a­tions have fallen sig­ni­fic­antly rel­at­ive to those else­where,” said Jonas Gol­ter­mann, deputy chief mar­kets eco­nom­ist at Cap­ital Eco­nom­ics.

He added that “soft employ­ment growth data and a clear change in tune from Fed chair [Jay] Pow­ell” had been the main drivers of rate cut expect­a­tions.

Mar­kets are fully pri­cing in a quarter­point interest rate cut from the Fed with a small num­ber of traders bet­ting on a bumper half-per­cent­age point cut.

Lower rates tend to weaken cur­ren­cies by redu­cing the return for investors on hold­ing assets in that cur­rency.