Federal Funds futures showed that investors had priced in a roughly 78.00% chance of the Federal Reserve delivering another rate hike in December. Typically, the prospect of tightening monetary policy is viewed as bullish for a country’s currency, which would explain this week’s strength in the US dollar.
Meanwhile, the Euro tumbled to a five-week low of $1.17575 on Tuesday, dented by the growing popularity of the far-right in Sunday’s German election, which has resulted in Chancellor Angela Merkel struggle to weave together a coalition government. Sentiment in the common currency was also hurt by growing tensions in Spain’s Catalonia region. EURUSD was last seen around the 1.1765-mark. The immediate trend is the pair has turned bearish, with a breach of the key support at 1.1750 potentially causing the sell-off intensify.