The euro extended its advance to almost $1.183 on Tuesday, putting the currency on the verge of its longest winning streak against the dollar in more than two decades and lifting its year-to-date gain to about 14%. The move has driven the Dollar Index to its weakest level since the first quarter of 2022 and pushed the greenback to its lowest level versus the Swiss franc since 2015. Traders cite diverging monetary-policy expectations as the main catalyst. Fed-funds futures now discount roughly 68 basis points of U.S. rate cuts this year, while markets expect the European Central Bank to keep policy broadly steady. The shift has dragged the U.S. 10-year Treasury yield below 4.20% and pushed two-year yields to fresh two-month lows, undermining demand for the dollar. Derivatives activity suggests investors are positioning for further euro strength. About two-thirds of recent options flows favor additional upside, according to trading desks, and risk-reversal skews have widened to their most euro-positive in months. Some participants are targeting a break above $1.20 if current trends in relative rates and capital flows persist.