Euro Rallies; Dollar Pauses With Central Banks in View

U.S. Dollar banknote is seen in this illustration taken on July 17, 2022. Dado Ruvic/Illustration/Reuters

LONDON—The euro rallied on Tuesday, while the dollar hovered below last week’s peak.

The jump in the euro, which sent it further away from the sub-parity levels of last week, coincided with falling expectations for an aggressive 100 basis point hike from the Federal Reserve this month, which knocked the dollar.