Euro sharpens decline to two-month lows

Euro fell in European trade against dollar for another session to two-month lows as haven demand increases on the greenback, amid expectations of earlier policy tightening in the US as inflation and growth improve. 

EUR/USD fell 0.5% to 1.1936, the lowest since April 13, after closing down 1.1% yesterday, the largest loss since March 2020 following the Federal Reserve's meeting. 

The dollar index rose 0.4% on Thursday for the third straight session, marking two-month highs at 91.75 as the greenback extends lead against a majority of rivals. 

The Fed was more bullish than expected before with its timeline for raising interest rates and forecasts for inflation and growth. 

The Fed expects gradual and solid recovery from Covid 19 pandemic this year, with goals proceeding towards inflation and employment marks faster than expected. 

June forecasts point to a 0.6% interest rate in 2023, meaning two rate hikes in 2023, with 13 members now expecting hikes in 2023 compared to 7 before. 

The Fed also raised inflation forecasts to 3.4% in 2021 from 2.4% in March, and raised growth forecasts to 7% this year from 6.5% in March.