The euro continues to grind lower on Monday with the EURUSD pair has lost the 1.30 handle for the first time since mid-2017 against the backdrop of a stronger USD index that hit a 17-month high earlier in the day.
The buck is widely supported by investor expectations on further tightening by the Federal Reserve. By the way, the December rate hike has been priced in already, and the current market optimism is more based on expectations of at least three more hikes in 2019. And the solid economic fundamentals from the US only support this view.
Apart from strong dollar, the euro is under pressure amid the continued Italy’s budget woes. Tomorrow the deadline expires that the EU officials set for the country to present a revised budget plan. But as we know, Rome has refused to change its initial plan, so there are further risks from this front for the European currency.
Technically, the initial target for the euro bulls now comes at 1.13. Meanwhile, on the downside, the pair may extend losses to 1.12 and below should the dollar strength persist in the nearest future.