Euro Slips as Dollar Demand Rises
The euro fell back below $1.12, retreating from one-month highs, as a global tech selloff revived demand for the safe-haven USD. Sentiment toward AI stocks weakened amid concerns that a Democratic sweep in the congressional elections could bring tighter regulation, slowing the industry's expansion. Meanwhile, investors continued to assess the European Central Bank's policy outlook. President Christine Lagarde said on Thursday that the ECB was monitoring incoming data to determine whether a rate hike would be warranted next month. Although the central bank held its deposit rate at 2.5% last week, several policymakers, including the heads of the German and Italian central banks, have signaled that a December increase may be likely. Eurozone inflation climbed to a three-year high of 4% in October, driven by energy costs, strengthening the case for further tightening. Money markets are currently pricing in two rate hikes by mid-2027, with the first potentially coming as early as December.
The euro fell back below $1.12, retreating from one-month highs, as a global tech selloff revived demand for the safe-haven USD. Sentiment toward AI stocks weakened amid concerns that a Democratic sweep in the congressional elections could bring tighter regulation, slowing the industry's expansion. Meanwhile, investors continued to assess the European Central Bank's policy outlook. President Christine Lagarde said on Thursday that the ECB was monitoring incoming data to determine whether a rate hike would be warranted next month.
Although the central bank held its deposit rate at 2.5% last week, several policymakers, including the heads of the German and Italian central banks, have signaled that a December increase may be likely. Eurozone inflation climbed to a three-year high of 4% in October, driven by energy costs, strengthening the case for further tightening. Money markets are currently pricing in two rate hikes by mid-2027, with the first potentially coming as early as December.