The Euro moved back above parity with the Dollar on Wednesday, the first time in a month, as speculation heightened that the Fed will slow its rate hikes, sending the greenback into decline.

The single currency rose 0.66% to $1.0042, the highest since 20th September, whilst the Pound edged up 1.05% to $1.1592, the highest level since 14th September. In addition, the Dollar fell against the Japanese Yen, down 0.6% to 146.9.

“It's a continuation of the (Dollar) sell-off that we've seen since the end of last week. Markets are anticipating a potential slowdown in the pace of Fed hiking,” stated Lee Hardman, MUFG currency analyst

“We don't think that's going to happen at the next meeting in November, but certainly by December there's a higher probability they could step down the pace to 50 basis points rather than the 75 basis points we've seen recently.”

The Federal Reserve’s aggressive tightening pace sent the Dollar on an upward trajectory, Reuters reports. Officials have started to indicate plans to decelerate the pace of rate hikes, according to the Wall Street Journal, leading markets to reprice.

Economists and traders forecast an additional 75 basis point rise next Wednesday, yet opinion is mounting that it will slow down to half a point in December.

In addition, the benchmark 10-year U.S. Treasury yield continued its decline from the multi-year high of 4.338% last week, and at the time of writing was down seven basis points at 4.038%.

Elsewhere, the Canadian Dollar rose to a three-week high of 1.352 per U.S. Dollar, prior to a central bank policy meeting, the Reuters report goes on to add.

In Australia, the Dollar edged up 1.24% to $0.64735, as inflation data piled the pressure on the Reserve Bank of Australia ahead of next week’s rate decision.