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(Bloomberg) -- The euro is poised for its longest losing streak since April as traders bet on an increasingly aggressive path for interest-rate cuts by the European Central Bank.

The common currency is set to fall for a fifth day, in a retreat from a 14-month high touched just last week. Since then, traders have raised the odds on an ECB cut this month to around 90% as slowing inflation and deteriorating business sentiment prompt central bank officials to endorse easing.

That’s challenging a market narrative that the ECB will lag the Federal Reserve in slashing rates. With strong US jobs data this week already having damped bets on another half-point Fed cut, the next test for the euro will be whether that’s backed up by key US payrolls figures on Friday.

“The mix of the Fed not rushing to ease and strong market expectations that the ECB might cut rates later this month continues to weigh on euro-dollar,” currency strategists at UniCredit SpA including Roberto Mialich wrote in a note. 

The euro has slumped more than 1% versus the dollar so far this week, and is approaching a key technical support level at $1.1028, its 55-day moving average. A break below that could open the door to more losses, challenging strategists’ average forecast in a Bloomberg poll for the currency to end the year at $1.11.

The last time the euro suffered like this, back in April, was also because of traders pushing back expectations for Fed rate cuts. Now, money markets expect around 180 basis points from the Fed and about 170 from the ECB by late 2025, a much narrower gap than seen two weeks ago.