EUR/USD Extends Slide Toward 1.1335 as Treasury Yields and Fed Hike Odds Surge

EUR/USD faces sustained downward pressure, retreating toward 1.1335 support as the U.S. Dollar Index holds near an eight-week high of 101.23. The currency pair slipped through 1.1400 and tested two-month lows near 1.1378 following stronger-than-expected U.S. flash PMIs and falling jobless claims of 197,000. Hawkish remarks from Federal Reserve officials, including Governor Michael Barr and New York Fed President John Williams, pushed implied October rate hike probabilities up to 77.5%. Simultaneously, the benchmark U.S. 10-year Treasury yield surged past 5.15% to 5.16%, its highest level since 2007, overshadowing improved German economic sentiment.