Euro Hits 17-Month Low
The euro continued to depreciate around $1.117 on Monday, its weakest level since May 2025, as mounting fiscal and political concerns in the region weighed on the currency. Spanish government and Socialist party officials are reportedly backing an early election after Prime Minister Pedro Sánchez’s government suffered a major parliamentary defeat last week, adding to concerns over France’s political stability and budget outlook. On the monetary policy front, the ECB is expected to take a cautious approach to further tightening as elevated energy prices raise inflation risks while weighing on growth. Eurozone inflation accelerated to 3.8% in September, its highest in three years and well above the ECB’s 2% target. Meanwhile, the dollar remained firm despite softer-than-expected US jobs data, adding to downward pressure on the euro even as expectations for a Federal Reserve hike this month were reduced.
117 on Monday, its weakest level since May 2025, as mounting fiscal and political concerns in the region weighed on the currency. Spanish government and Socialist party officials are reportedly backing an early election after Prime Minister Pedro Sánchez’s government suffered a major parliamentary defeat last week, adding to concerns over France’s political stability and budget outlook. On the monetary policy front, the ECB is expected to take a cautious approach to further tightening as elevated energy prices raise inflation risks while weighing on growth. 8% in September, its highest in three years and well above the ECB’s 2% target.
Meanwhile, the dollar remained firm despite softer-than-expected US jobs data, adding to downward pressure on the euro even as expectations for a Federal Reserve hike this month were reduced.