Euro Slips to Fresh 15-Month Lows
The euro started October weaker, slipping toward $1.13 and its lowest level since May 2025, after falling more than 2% against the dollar in September, its sharpest monthly decline in 14 months. Markets expect the ECB to tighten more slowly than the Fed, with further ECB hikes priced in over the coming year and the next move potentially in December alongside updated economic projections. Meanwhile, inflation accelerated across several major European economies in September, driven largely by fuel prices. ECB President Christine Lagarde said the increase has yet to generate significant second-round effects, suggesting policymakers may maintain a measured approach. A subdued eurozone growth outlook, currently seen at just 0.9% this year, could further constrain the ECB’s room for aggressive tightening. Political uncertainty ahead of elections in France, Spain and Italy next year is also weighing on sentiment toward the single currency.
13 and its lowest level since May 2025, after falling more than 2% against the dollar in September, its sharpest monthly decline in 14 months. Markets expect the ECB to tighten more slowly than the Fed, with further ECB hikes priced in over the coming year and the next move potentially in December alongside updated economic projections. Meanwhile, inflation accelerated across several major European economies in September, driven largely by fuel prices. ECB President Christine Lagarde said the increase has yet to generate significant second-round effects, suggesting policymakers may maintain a measured approach.
9% this year, could further constrain the ECB’s room for aggressive tightening. Political uncertainty ahead of elections in France, Spain and Italy next year is also weighing on sentiment toward the single currency.