Markets not taking account of Fed plans for rate increases

The euro has generally had the upper hand against the dollar this year, climbing from $1.08 to as high as $1.16 at one stage, despite the further loosening of monetary policy by the ECB, including cuts to interest rates.

The yen has also made big gains against the US currency.

The dollar fell from ¥120 at the end of January to ¥106 in early May, even though the Bank of Japan moved to a negative interest rate policy earlier this year.