Euro Slips to Two-Month Low
The euro ended the week below the $1.14 threshold, marking its weakest level in two months, as the US dollar remained supported by growing expectations of further Federal Reserve rate hikes this year. Hawkish remarks from Fed officials, coupled with a string of economic data pointing to robust growth and a resilient labor market, reinforced expectations of tighter US monetary policy. Meanwhile, in Europe, the US-Iran conflict and recent energy-price developments continued to stoke concerns over renewed inflationary pressure. Money markets are pricing in roughly 100 basis points of interest-rate hikes by the end of October 2027. On the economic data front, German consumer sentiment deteriorated more sharply than expected heading into October, as rising energy prices weighed on households’ income expectations.
14 threshold, marking its weakest level in two months, as the US dollar remained supported by growing expectations of further Federal Reserve rate hikes this year. Hawkish remarks from Fed officials, coupled with a string of economic data pointing to robust growth and a resilient labor market, reinforced expectations of tighter US monetary policy. Meanwhile, in Europe, the US-Iran conflict and recent energy-price developments continued to stoke concerns over renewed inflationary pressure. Money markets are pricing in roughly 100 basis points of interest-rate hikes by the end of October 2027.
On the economic data front, German consumer sentiment deteriorated more sharply than expected heading into October, as rising energy prices weighed on households’ income expectations.