Euro declines to 20-year lows ahead of European data

Euro fell in European trade to 20-year lows against dollar for the fourth straight session, heading for the second weekly loss in a row ahead of major European data. 

The dollar rose to two-decade highs after US 10-year treasury yields rallied as well, with the Federal Reserve hiking interest rates to 2008 highs. 

EUR/USD fell 0.7% to 0.9770, the lowest since October 2002, after falling 0.1% yesterday, the third loss in a row, as investors shift focus to the greenback. 

Euro is down 2.3% so far this week against dollar, almost marking the second weekly loss in a row following steps taken by the Fed to control inflation. 

Data

Investors await major data about European sectors, including data on manufacturing and services for September. 

Such data will offer clues on the health of the economy in the third quarter of the year, and might pave the way for even more aggressive policy tightening by the ECB. 

The Dollar

The dollar index rallied 0.5% on Friday, marking 20-year highs at 111.83 and resuming the gains against a basket of major rivals. 

US 10-year treasury yields rose 0.5% today to 12-year highs at 3.738% after the Federal Reserve decided to hike interest rates by 75 basis points this week to 3.25%.

The world's largest central bank asserted its plans to continue to tighten policies and increase interest rates until March 2023 to rein in inflation.