The euro declined in European markets on Tuesday against a basket of global currencies, extending its losses for the second consecutive day against the US dollar and moving away from a two-week high, due to active correction and profit-taking, alongside a rebound in US dollar levels ahead of key economic data from the United States.

Amid the entrenched inflationary pressures currently facing policymakers at the European Central Bank, the likelihood of a European interest rate cut in September has declined. To reprice these expectations, investors are awaiting further economic data from the Eurozone.

The Price

EUR/USD exchange rate today: The euro fell against the dollar by 0.15% to $1.1554, down from todays opening price of $1.1568. The highest level recorded was $1.1588.

The euro ended Mondays session down 0.15% against the dollar, marking its first loss in the past three days, after earlier hitting a two-week high at $1.1597.

The US Dollar

The US Dollar Index rose by 0.15% on Tuesday, extending its gains for the second straight session, as the currency continued to recover from a two-week low of 98.59 points, reflecting sustained strength in the US dollar against a basket of global currencies.

This rebound comes ahead of key US economic data set to be released later today, concerning the performance of the services sector in July, which provides a strong indicator of the pace of US economic activity during the third quarter of this year.

European Interest Rates

The Consumer Price Index in Europe recorded a 2.0% rise in July, higher than market expectations of a 1.9% increase, and matching the previous reading of a 2.0% rise.

These figures indicate persistent inflationary pressures on policymakers at the European Central Bank.

According to Reuters sources, a clear majority at the latest ECB meeting expressed a preference to keep interest rates unchanged in September for the second consecutive meeting.

Market pricing of a 25-basis-point rate cut by the European Central Bank in September is currently holding below 30%.

To reprice these expectations, investors will closely monitor upcoming economic data from Europe, in addition to statements from ECB officials.