The euro struck its lowest level in 16 months this week as traders bet that the European Central Bank will stick to its accommodative policies even though widespread inflation is prompting US and UK policymakers to raise interest rates.
Traders are dialling up their wagers that the Federal Reserve and Bank of England will lift rates from historic lows over the next year at a time when the ECB is pushing back against market expectations that it too will lift borrowing costs in 2022.
The result has been a sharp decline in the euro against the doll