Euro futures fell to their lowest close in over a year, dropping near 1.1380 as the U.S. dollar continued to firm following the recent FOMC meeting. The downward pressure was further accelerated by comments from ECB President Christine Lagarde, who indicated that the central bank could exercise more patience moving forward, taking into account geopolitical shifts in the Middle East between the U.S. and Iran. While the market had previously priced in additional rate hikes following an interest rate increase earlier this month, traders are now adjusting to a potential pause in tightening. Concurrently, the CVOL index revealed that volatility has been firming alongside the decline in the currency. Positioning data showed speculators were adding to net longs prior to the FOMC meeting, setting up an intriguing backdrop for upcoming data releases.
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