The euro fell in European trading on Tuesday against a basket of major currencies, extending its losses for the fifth consecutive session against the U.S. dollar and reaching a three-month low, as selling pressure on the single currency persisted amid strong demand for the dollar as the preferred safe investment.

The slowdown in eurozone inflation during October eased price pressures on European Central Bank policymakers and revived expectations of a possible rate cut in December.

Price Overview

Todays exchange rate: The euro fell 0.2% against the U.S. dollar to $1.1498 its lowest level since August 1 down from the opening level of $1.1520, after hitting an intraday high of $1.1521.

On Monday, the euro closed 0.15% lower versus the dollar, marking its fourth straight daily loss amid persistent selling pressure.

U.S. Dollar

The U.S. Dollar Index rose about 0.2% on Tuesday, extending gains for a fifth consecutive session to reach a three-month high of 100.05 points, reflecting continued strength in the greenback against a basket of major and minor currencies.

This advance came as investors favored the dollar as the best available investment, amid rising uncertainty over whether the Federal Reserve will proceed with another rate cut in December, particularly after a series of hawkish comments from Fed policymakers.

The Federal Reserve lowered interest rates last week for the second consecutive time, though Chair Jerome Powell indicated that this may be the final cut of the year.

European Interest Rates

Data released late last week showed headline inflation in the eurozone slowed as expected in October, while core inflation remained steady easing price pressures on European Central Bank officials.

Following these figures, market pricing for a 25-basis-point ECB rate cut in December rose from 10% to 25%.

Investors now await further economic data from across Europe, as well as additional remarks from European Central Bank officials, to reassess the outlook for monetary policy.