Euro futures traded lower, reaching 1.1350 before closing near 1.1365, marking the lowest level since mid-July. The decline was driven by U.S. dollar strength following rising inflation expectations and shifting Federal Reserve rate hike expectations. The euro has fallen approximately 3% since its August peak above 1.17. Meanwhile, option-derived volatility increased alongside the market decline, as measured by the CVOL index. Speculators expanded their net short positions last week, extending a continuous net short posture in euro futures since late June.