The euro fell in the European market on Monday against a basket of major currencies, extending losses for the second consecutive day against the U.S. dollar and moving away from a two-week high, as corrective moves and profit-taking continued alongside a rebound in the U.S. currency supported by Federal Reserve officials.

Expectations for a European rate cut in December remain weak, despite some easing in inflationary pressures on European Central Bank policymakers, especially after recent data showed that inflation slowed in October.

Price Overview

The euro fell 0.25% against the dollar to 1.1595 dollars, from todays opening level of 1.1623 dollars, and recorded a high of 1.1624 dollars.

The euro ended Fridays session down 0.1% against the dollar, marking its first decline in four days, after hitting a two-week high the previous day at 1.1656 dollars.

The euro posted a 0.5% gain against the dollar last week, its second straight weekly rise, driven by concerns over a U.S. economic slowdown amid the longest federal government shutdown.

U.S. Dollar

The U.S. dollar index rose 0.2% on Monday, extending gains for the second straight session, as the currency continued to recover from two-week lows, reflecting ongoing strength against major and minor peers.

Recent comments from several Federal Reserve officials were more hawkish than markets expected, pushing down the probability of a U.S. rate cut in December to around 40%, compared with a steady 95% a month ago.

European Interest Rates

Money-market pricing for a 25-basis-point European Central Bank rate cut in December is currently stable around 25%.

To reassess those expectations, investors are awaiting several economic releases in Europe, in addition to monitoring comments from ECB officials.