Euro trims losses but Fed rate-hike bets keep gains in check

The Euro (EUR) stages a rebound against the US Dollar (USD) on Tuesday as month-end repositioning weighs modestly on the Greenback, limiting support from upbeat US economic data. At the time of writing, EUR/USD trades around 1.1415 after hitting an intraday low of 1.1382.

US JOLTS Job Openings rose to 7.594 million in May from April's revised 7.585 million, beating market expectations of 7.3 million.

Meanwhile, the Conference Board's Consumer Confidence Index rose to 91.2 in June from a downwardly revised 90.6 in May. The reading fell short of economists' expectations of 94.7, according to a Reuters poll.

The US Dollar Index (DXY), which tracks the Greenback against a basket of six major currencies, trades around 101.23 after hitting an intraday high of 101.43 and remains on track for a second consecutive monthly gain, leaving EUR/USD on course for a second straight monthly decline.

The Greenback remains supported by hawkish Federal Reserve (Fed) expectations and lingering uncertainty over the next round of US-Iran talks. While US and Iranian envoys have arrived in Doha, no direct talks between the two sides are scheduled.

Cleveland Fed President Beth Hammack said, "Inflation is still too high," adding that the Fed "may need to consider rate hikes" and that "core inflation has been elevated; it's not just an energy story."

Traders are currently pricing in a 67% probability of a September rate hike, according to the CME FedWatch Tool. Attention now turns to this week's labor market data, including the ADP Employment Change report and the Nonfarm Payrolls (NFP) report, for fresh clues on the Fed's policy outlook.

On the Euro side, expectations for another European Central Bank (ECB) rate hike have become less certain as easing Oil prices reduce inflation concerns.

Speaking on Tuesday, ECB policymaker Olli Rehn said, "I don't see major second-round effects materialising," and added, "It's important not to commit to a predetermined rate path." Meanwhile, ECB policymaker Pierre Wunsch said, "We're going to have some second-round effects," adding that "we might need another hike."