The dollar slipped against the euro for a third straight session on Tuesday, following a Reuters story that European Central Bank policymakers are considering raising interest rates by a bigger-than-expected 50 basis points at their meeting on Thursday to tame record-high inflation.
The rebound in the euro, which sent it further away from the sub-parity levels of last week, coincided with falling expectations for an aggressive 100 basis points hike from the U.S. Federal Reserve this month, which knocked the dollar.
The euro has rebounded after slipping below $1.0000 last week, its first foray below parity since 2002. Analysts are reluctant to turn bullish on the euro, however, given ongoing concerns about supplies of natural gas and the hit to its economy and how hawkish the ECB can really be.
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