Investing.com - The euro fell to fresh seven-month lows against the dollar on Tuesday as investors turned their attention from the Paris attacks back to the diverging monetary policy expectations between the Federal Reserve and other world central banks.
EUR/USD hit lows of 1.0643, the weakest since April 16 and was last at 1.0647, off 0.38% for the day.
Demand for the dollar continued to be underpinned by expectations that the Fed will hike interest rates as soon as next month.
U.S. inflation data due out later in the day was expected to provide more clarity on prospects for a December rate hike.
In contrast, the European Central Bank is expected to expand its quantitative easing program and possibly cut rates further into negative territory at its December meeting.
The euro also remained under pressure amid concerns that the terrorist attacks in Paris could undermine the already fragile economic recovery in the region.
The single currency was lower against the yen, with EUR/JPY down 0.24% to 131.30, not far from Monday’s six-and-a-half month lows of 130.63.
Against sterling, the euro fell to three-month lows of 0.7010.
The dollar pushed higher against the yen and the pound, with USD/JPY easing up 0.11% to 123.30 and GBP/USD down 0.29% to 1.5161.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up 0.27% to 99.74, the strongest since April 13.